GSO back in the market with European Senior Debt Fund II – exclusive

Blackstone’s credit arm secures follow-on commitment from Asian insurer for its latest European fund after predecessor closed on €1.9bn.

GSO Capital Partners has started fundraising for GSO European Senior Debt Fund II, its second European senior debt fund, with Taiwan Life Insurance having revealed a follow-on commitment to Blackstone’s credit arm last month.

The Taipei-headquartered insurance company committed €50 million to GSO European Senior Debt Feeder Fund II, according to a disclosure from the insurance firm’s affiliate, CTBC Holdings, on 28 January.

The insurance firm committed €20 million to a predecessor vehicle, GSO European Senior Debt Feeder Fund in January 2015, another disclosure showed. An industry source confirmed to PDI that feeder funds typically have ownership interests in offshore master funds, which is a common industry practice when structuring a vehicle.

No regulatory filings on the new funds could be obtained by the time of publication. A spokeswoman for Blackstone in New York declined to comment on the latest fund launch.

PDI’s requests to Taiwan Life for comment were not returned.

GSO European Senior Debt Fund II is the firm’s second drawdown private credit fund targeting European companies.

Its predecessor garnered €1.96 billion in committed capital and had €1.5 billion in available capital for the fund, according to GSO’s fourth-quarter investment records as of 31 December 2018.

Its total internal rate of return was 10 percent, net of fees, in the same period. The multiple of invested capital was 1.5x based on the fund’s realised investments of €740 million. The first fund had a four-year investment period, from February 2015.

The fund series aims at “providing private secured loans to large and mid-cap companies in Europe”, according to a statement from Simpson Thacher, a New York-headquartered law firm, that represented GSO Capital Partners for its first European direct lending fund launched in 2015.

Fund I collected commitments from more than 40 investors in October 2015, according to two regulatory filings.

As of Q4 2018, Blackstone’s credit division managed $33.6 billion, in committed capital, across eight flagship drawdown funds.

GSO has other closed-end vehicles investing in senior secured debt based on a floating lending rate. A prospectus by GSO Capital Partners on Strategic Credit Fund showed that fund may invest in senior secured loans made to US and non-US corporate borrowers operating across various industries and geographical regions.