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

Related-Company Fees: Normal Industry Practice or Conflicted Compensation?

Nov 11 2015 | 4:23pm ET

Regulatory agencies as well as investors are increasingly exploring whether certain...


Ferrari Roars in Wall Street Debut

Oct 21 2015 | 4:28pm ET

Shares of supercar maker Ferrari jumped as much as 15 percent to a high of nearly...

Guest Contributor

Private Debt - What is the Opportunity?

Nov 11 2015 | 3:28pm ET

In this contributed article, Rob Allard, founding partner of Firebreak Capital...


Editor's Note

    Oct 21 2015 | 10:41am ET

    One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…