Blue Owl Capital this week launched a dedicated real estate finance strategy with the acquisition of Prima Capital Advisors and the hire of Jesse Hom from Singapore-based wealth fund GIC to lead its charge into the sector, reports affiliate title Real Estate Capital USA.
Marc Lipschultz, co-chief executive officer at the New York-based alternative manager, attributed the move to the growing lack of capital in the current real estate market in an April 10 note. “Through this acquisition of Prima and the addition of Jesse Hom, we’re setting out to create a differentiated and high-quality real estate lending capability to meet this need,” he said.
On trend
Blue Owl’s move into real estate finance tracks with the rise of the ‘all-weather manager’ as more real estate investment managers have developed or acquired the ability to invest across the capital stack. In recent years, Blue Owl has been a notable repeat manager to feature on PERE‘s annual ranking of the world’s biggest private real estate managers because of fundraising accolades.
The addition of Hom, who currently works as global head of real estate credit at GIC, will tack on senior leadership to the real estate lending division. Hom will start at Blue Owl on June 17 this year, per his LinkedIn post, and take on the role of chief investment officer for the firm’s real estate platform. He will also lead the newly created Blue Owl Real Estate Finance strategy.
Hom will report to Marc Zahr, co-president of Blue Owl and head of real estate. As part of Hom’s remit, he will also focus on growing the firm’s triple net lease business and look for opportunities to scale the real estate platform.
GIC did not comment on Hom’s departure or related succession plans for his role at the time of publication. Hom noted he would be transitioning out of the company through June after a 15-year tenure.
Peer parallels
The acquisition of advisory Prima Capital Advisors, based in Scarsdale, New York, gives Blue Owl a headstart of sorts with carving out real estate lending market share, according to some market analysts who spoke with Real Estate Capital USA. Prima currently manages $10 billion in assets with an investor base spanning institutional and high-net-worth clients.
As noted by PERE, Blue Owl’s entry into real estate debt has taken a hybrid approach compared to other firms featured across the PERE 100 ranking and Real Estate Debt 50 leaderboard. Of the 24 firms featured across both PERE and Real Estate Capital USA’s rankings, most managers have opted to enter the debt space either organically via hire and build-out or by acquiring an existing lending platform. Blue Owl, which currently ranks 15th on the PERE 100, opted for a combination of the two paths.
As a lender, Prima focuses on investing in commercial mortgage-backed securities, a subsector of the broader real estate debt market that has been picking prior momentum back up after a slow 2023.
The firm was majority owned by Stone Point Capital, a manager based in Greenwich, Connecticut. Blue Owl acquired Prima through a combination of about $157 million of equity and $13 million in cash. The acquisition is expected to close in the second or third quarter of this year, with Prima’s employees joining Blue Owl at that time.
In a joint statement made April 9, Lipschultz and Blue Owl co-chief executive officer Doug Ostrover said Prima’s acquisition and Hom’s appointment underscore how the firm thinks about strategic inorganic growth at the investment platform level.
“Marc Zahr and his team built a leading triple net real estate business that will become even more comprehensive and compelling with the addition of Prima’s debt capabilities,” Ostrover and Lipschultz said.
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