Blackstone Buys Credit Hedge Fund, Plans Share Buyback

Jan 10 2008 | 1:07pm ET

Private equity giant The Blackstone Group is getting bigger, agreeing to buy hedge fund GSO Capital Partners for $930 million. Meanwhile, it’s unveiled a plan to stop its stock price from diminishing.

GSO, which manages $10 billion in leveraged finance assets, including a multi-strategy credit hedge fund, is headed by former Credit Suisse executive Bennett Goodman. He will join the firm’s executive committee. Blackstone will pay $620 in cash and stock at closing, with an additional $310 to be paid over five years subject to performance targets.

“The combination of GSO’s business with our existing corporate debt operations will produce one of the largest credit platforms in the alternative asset management business, with over $21 billion of total assets under management,” Blackstone CEO Stephen Schwartzman said. “Given the current dislocation in the credit markets, this is an ideal time to create a more powerful, diversified platform from which to grow Blackstone’s business.”

Goodman, who headed Credit Suisse’s alternative capital unit, founded GSO with Tripp Smith and Doug Ostrover, formerly co-heads of leveraged finance at the bank, founded the hedge fund three years ago. It has offices in New York, London, Los Angeles and Houston.

Blackstone—which has seen its share price plummet more than 40% since its initial public offering in June—also announced a $500 million share buyback plan.


In Depth

FINtech Focus: Fundbase Aims To Revolutionize Access To Hedge Funds

Jan 23 2015 | 11:03am ET

Global investment in financial technology—also known as fintech—is booming....

Lifestyle

Ex-Hedge Fund Billionaire Won’t Run For Senate

Jan 23 2015 | 5:48am ET

Ex-hedge fund manager Tom Steyer will not run for Senate after Sen. Barbara Boxer...

Guest Contributor

From Switzerland With Love: Some Hard Truths About Central Banks And Risk

Jan 23 2015 | 7:54am ET

In the wake of the Swiss National Bank uncoupling the country’s currency from...

 

Editor's Note