Off-duty: Blue Owl’s Michael Rees on how Dyal got its name, Guns N’ Roses and being a Yinzer

Buyouts’ Off-duty provides a snapshot of top investors, including a few details about what they do when not chasing deals.

Michael Rees, co-president of Blue Owl Capital, may rightly be called the father of modern GP staking. As the one-time COO of Neuberger Berman’s alternatives business, he came up with the idea of a fund that would acquire passive minority interests in private equity firms. Founded in 2011, Dyal Capital is today the market’s largest GP stakes investor.

Last spring, Dyal merged with Owl Rock Capital Partners, forming Blue Owl, a $94 billion multi-strategy alternative asset manager.

Rees was part of Neuberger’s 2009 spinout from the bankrupt Lehman Brothers. Before, he held numerous executive roles at Lehman and was an associate with Marakon Associates.

Rees sits on the board of The Opportunity Network, a non-profit that supports under-served students, for which he created a private equity summer internship program in 2020.

Where is your hometown?

Proudly from Pittsburgh.

If you weren’t in PE, what job would you like to have?

I spent most of my time in college preparing to be a mechanical engineer. My children roll their eyes when I go on and on about heat transfer or thermodynamics in everyday life. I guess that’s where my natural curiosity would take me.

How do you relax when you’re not working?

Since the introduction of the iPhone, I’m not sure there is such a thing as “not working.” But I cherish the time I get to spend with family, either at my children’s sporting events or trying to get a few runs down the mountain skiing in Vermont.

What book are you reading right now?

I’m not sure I have the attention span anymore to read an entire book. I’ve read the first third of lots of books, mostly business biographies. I think Malcom Gladwell’s Outliers had the most profound impact on my career and the book I discuss the most during interviews with prospective teammates.

What is your favorite song, album, performer or music genre?

The Dave Matthews Band channel on XM probably gets the most airtime, but that’s only because there isn’t a Guns N’ Roses channel. Saw GNR at Wrigley Field last year and it brought me back to 1993. Was amazing.

What is your favorite place for a vacation, sanctuary or a place to explore? 

We like South Beach. The heat, the people watching, the vibe. It’s not what I’d call a sanctuary, but it’s where I like to go for a change of scenery.

Who in your career do you regard as a mentor?

Erin Callan [ex-CFO of Lehman Brothers] is undoubtedly the most impressive person I ever had the privilege to work with. I learned an unbelievable amount just by watching her. She is an amazing combination of intellect and relationship-building. It’s rare to have the smartest person in the room also be the best at relationship-building.

Professionally, what was your toughest moment?

Spinning Dyal out of Neuberger Berman was both the toughest and most rewarding. It was difficult to say goodbye to a firm where I spent 20 years, and where I was involved in some of the seminal events in the organization’s history. But the spinout was also the beginning of a new chapter, building and growing Blue Owl. It has been exciting but it was tough to say goodbye to my NB colleagues.

What was your most rewarding moment?

It’s cliched to say the birth of my kids, but nothing that has or could happen in business could ever compare to those two moments. And without Dylan and Alexia, there could be no Dyal.

What PE buzz words or jargon do you hate most?

Synergistic. When people say that they are trying too hard.

What advice would you give a young person interested in a PE career?

Going back to Outliers. A career is built on many, many little things over a long time. Most people don’t get many career-defining moments. So, I tell young team members that it’s about building tiny positive aspects into daily routine or into each interaction. A career is the accumulation of all of those little things. If you have a lot of them, you’ll be successful. And if you don’t, you’d better be lucky.

What word or phrase best describes you?

A Pittsburgher, which some call a Yinzer.