Blue Owl Capital Inc. (NYSE: OWL), a prominent alternative asset manager, has announced a definitive agreement to acquire Ipi Partners, LLC (“IPI Partners”), a specialized digital infrastructure fund manager. This strategic acquisition, valued at approximately $1.0 billion, marks a significant expansion of Blue Owl’s digital infrastructure capabilities and adds approximately $10.5 billion in assets under management (AUM). The deal, expected to close in late 2024 or early 2025, positions Blue Owl to capitalize on the burgeoning data center market and further strengthens its appeal to investors seeking exposure to this high-growth sector.
IPI Partners: A Leading Force in Digital Infrastructure Investment
Founded in 2016 as a joint venture between ICONIQ Capital and Iron Point Partners, IPI Partners has rapidly become a leading private investor in the data center space. With a portfolio encompassing 82 data centers across the US, EMEA, and APAC regions, IPI Partners boasts over 2.2GWs of leased capacity. Their focus is on serving large, high-quality hyperscale and enterprise data center users, with a tenant base that includes numerous Fortune 100 companies. Headquartered in Chicago, IL, IPI Partners has cultivated a global presence with over 70 team members, including more than 50 investment professionals dedicated to this specialized asset class.
Alt: Global footprint of IPI Partners data centers across US, EMEA, and APAC regions, showcasing extensive international presence in digital infrastructure.
As of June 30, 2024, IPI Partners managed approximately $10.5 billion in assets, demonstrating substantial growth and investor confidence in their focused strategy. The acquisition by Blue Owl is set to further propel IPI Partners’ growth trajectory, providing access to Blue Owl’s extensive resources and network.
Strategic Rationale for Blue Owl’s Acquisition of IPI Partners
For Blue Owl, the acquisition of IPI Partners is a strategic move to enhance its existing digital infrastructure strategy and complements its successful net lease business. The digital infrastructure market, particularly data centers, is experiencing exponential growth driven by cloud computing, artificial intelligence (AI), and increasing data consumption. This acquisition allows Blue Owl to tap into this massive market opportunity and meet the growing investor demand for strategies focused on these secular tailwinds.
Doug Ostrover and Marc Lipschultz, Co-CEOs of Blue Owl, emphasized this strategic fit: “The acquisition of IPI with its deep sector expertise complements our existing net lease strategy while providing an ideal opportunity to expand Blue Owl’s digital infrastructure strategy. There is a massive market opportunity to finance data centers, matched by an increasing investor appetite for additional strategies investing behind cloud and AI-driven secular tailwinds.”
The integration of IPI Partners will position Blue Owl as a more comprehensive provider of capital solutions in the digital infrastructure space. By combining Blue Owl’s net lease expertise with IPI Partners’ specialized data center investment capabilities, the combined entity offers a compelling value proposition for investors seeking diversified exposure within real estate and alternative assets.
Leadership and Integration of IPI Partners into Blue Owl
Upon completion of the acquisition, IPI Partners will operate within Blue Owl’s Real Estate platform, under the continued leadership of Blue Owl Co-President Marc Zahr. Matt A’Hearn, Managing Partner of IPI Partners, will assume the role of Head of Blue Owl’s digital infrastructure strategy, reporting directly to Marc Zahr. This leadership continuity ensures a seamless transition and leverages the expertise of the existing IPI Partners team. All of IPI Partners’ employees are expected to join Blue Owl, maintaining the team’s deep sector knowledge and operational capabilities.
Alt: Matt A’Hearn appointed as Head of Digital Infrastructure Strategy at Blue Owl, highlighting leadership transition and expertise integration following IPI Partners acquisition.
Furthermore, an affiliate of ICONIQ Capital will partner with Blue Owl to support the future growth of the IPI Partners business. This partnership includes providing services such as investment analysis and investor relations, ensuring continued momentum and leveraging ICONIQ’s experience in the digital infrastructure sector.
Investor Benefits and Future Outlook
The acquisition of IPI Partners is expected to be neutral to Blue Owl’s earnings in 2025 and modestly accretive in 2026, indicating the financial prudence of the deal and its potential for future value creation. For investors, this acquisition offers several key benefits:
- Enhanced Exposure to Digital Infrastructure: Investors gain access to a leading platform in the rapidly growing data center market through Blue Owl’s expanded digital infrastructure strategy.
- Diversification: The combination of net lease and data center strategies provides diversification within real estate and alternative asset investments.
- Experienced Management Team: The continued leadership of Marc Zahr and Matt A’Hearn, along with the experienced IPI Partners team, ensures expertise and continuity in managing these strategies.
- Growth Potential: The data center market is projected for significant growth, driven by increasing demand for cloud services and AI, positioning IPI Partners and Blue Owl for continued success.
Divesh Makan, a Founding Partner at ICONIQ Capital, expressed confidence in the future: “We are excited to deepen our existing partnership with Blue Owl to advance IPI’s market leadership and further execute on this generational opportunity.”
Tom Lynch, a Managing Partner at Iron Point, also highlighted the positive outlook: “We are confident that the addition of Blue Owl will enable IPI to achieve even greater scale to meet the needs of the world’s largest technology companies.”
Conclusion: A Strategic Acquisition for the Digital Age
Blue Owl’s acquisition of IPI Partners represents a significant strategic move to strengthen its position in the digital infrastructure investment landscape. By integrating IPI Partners’ specialized expertise and substantial portfolio, Blue Owl is well-positioned to capitalize on the expanding data center market and deliver compelling investment opportunities. This acquisition not only enhances Blue Owl’s offerings but also provides IPI Partners with the platform to achieve even greater scale and market leadership in the dynamic world of digital infrastructure. For investors, this signifies a powerful combination poised for continued growth and success in the digital age.
