Blackstone’s GSO dives into distressed debt investing
Posted by: in Private Industry NewsFiled under: Private equity industry, Value and lack thereof
Early this year, The Blackstone Group LP (NYSE: BX) agreed to buy GSO Capital Partners, a hedge fund that focuses on leveraged finance, for a cool $930 million. Stephen A. Schwarzman, Blackstone’s CEO, stated that the deal would create “one of the largest credit platforms in the substitute asset management business.” Yes, it’s an attractive space, especially in light of the credit crunch.
Moreover, Blackstone isn’t wasting time in leveraging the GSO platform. According to a report in Bloomberg, it looks like it is raising a new fund that’s focused on distressed debt.
True, there hasn’t been a surge in defaults and bankruptcies, but such things usually have lag times, and if the economy remains sluggish, there are prone to be many distressed opportunities.
However, the distressed investment market is getting crowded. Some of the recent players include the Carlyle Group and Oaktree Capital Management. In fact, Monarch Alternative Capital and Cerberus Capital Management LP are in the market raising their own distressed funds.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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