GSO approaches final close on energy debt fund

The Blackstone-owned firm aims to close the strategy at $3.5 billion at the end of June, having raised the money over the past six months.  

GSO Capital Partners, the private debt arm of The Blackstone Group, is nearing its $3.5 billon fundraising goal for the GSO Energy Select Opportunities Fund and expects to close the vehicle to new money at the end of June, according to sources familiar with the matter. The firm began raising money for the strategy in January.

The fund held a first close in April and is going to hold a second close soon, with each closing estimated at around one third of the total capital. The firm had $1 billion more worth of interest in the fund, but has been turning those investors away, opting to close at its stated hard cap of $3.5 billion, according to Bloomberg.

GSO declined to comment on fundraising.

The fund will focus on private loans to distressed and stressed energy companies. The firm is no longer planning to manage a fund for liquid energy credit, as previous reports suggested it would.

Limited partners in the strategy include the Nashville & Davidson County Metropolitan Government Employee Benefit Trust Fund in Tennessee, the Louisiana Teachers’ Retirement System and the Teacher Retirement System of Texas, among others.

Blackstone and many other alternative investment firms have been launching energy debt funds to capitalize on the opportunity created by plummeting oil prices and distressed companies in the sector. Apollo Global Management closed its own Apollo Energy Opportunity Management fund last month at $1.045 billion.

GSO has about $75 billion in assets under management across its rescue lending funds, mezzanine funds, business development companies, credit hedge funds and CLOs. The firm announced two weeks ago that Doug Ostrover, one of its three co-founders, will be leaving the firm on 1 July, but will stay on as an external advisor.