Sector shock from Partners Group redemption cap

Partners Group’s move to cap redemptions on its $8.6b Global Value SICAV private equity fund, after a surge in withdrawal requests, put pressure on alternative asset managers including Blue Owl Capital (OWL).

Blue Owl’s 5.16% 1 day share price gain to US$10.19 partly retraced the sector hit from the Partners Group redemption cap, although its year to date share price return is down 33.44% and the 1 year total shareholder return is down 42.61%, pointing to fading momentum despite a slightly positive 3 year total shareholder return of 1.45%.

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With Blue Owl’s share price down sharply over the past year but the stock trading below some analyst targets, the key question is whether recent sector stress has created an opening or whether the market already reflects future growth.

Most Popular Narrative: 31.8% Undervalued

With Blue Owl closing at $10.19 versus a narrative fair value of $14.93, the current quote frames a wide gap between sentiment and modeled fundamentals.

Significant ongoing growth in permanent capital vehicles, particularly through expansion in private credit, real assets, and evergreen/interval fund strategies, is providing stable and recurring management fee revenue and positioning Blue Owl for higher future earnings and durable margin expansion. Structural shifts away from traditional bank lending toward private lenders, combined with robust demand for alternative credit and asset backed finance, are enabling large pipeline growth and high deployment opportunities, directly supporting future AUM growth and upward trajectory in revenues.

Curious what earnings path and margin profile sit behind that valuation gap. The narrative leans on compounding fee revenues and a richer profit mix over time. Want to see which revenue trajectory and profitability step change have been baked into that $14.93 fair value, and how they interact with a relatively low discount rate and future P/E assumption.

Result: Fair Value of $14.93 (UNDERVALUED)

However, the upbeat earnings story collides with risks around weaker retail private credit flows and intense fee pressure, which could challenge those margin and valuation assumptions.

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Another way to look at valuation: earnings multiple test

That 31.8% “undervalued” fair value hinges on growth and margin assumptions. On current numbers, Blue Owl trades on a P/E of about 79.2x, compared with 39.3x for the US Capital Markets industry and 47.3x for peers, while the fair ratio sits nearer 20.5x. That gap signals meaningful valuation risk if sentiment or forecasts cool.

For a closer look at what today’s earnings multiple might be implying about future expectations, and how other companies screen on the same yardstick, See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

With sentiment pulled in two directions by risks on one side and potential rewards on the other, this is a moment to move quickly, examine the underlying data, and come to your own view using the 1 key reward and 3 important warning signs

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.