GSO co-founder Smith set to launch new firm in 2019

No fundraising target for a debut fund has been set yet, but it will be in the billions of dollars.

The ‘S’ in GSO Capital Partners is set to strike out on his own next year, following in the footsteps of ‘O’, PDI understands.

Tripp Smith is set to launch his own credit shop early next year, which will likely focus on special situations and distressed opportunities, similar to GSO’s rescue-lending business, a person familiar with the matter told Private Debt Investor. Before his departure at the end of June, GSO closed its latest such fund, the $7 billion GSO Capital Solutions III.

The firm Smith launches will look to capitalise on an expected downturn. The firm will shy away from mid-market direct lending and could take advantage of any opportunities in that space that arise as a result of any downturn or market correction.

Smith declined to comment.

Smith would invest his own money alongside investor capital from a likely global limited partner base, the source told PDI. While an initial fundraising target has yet to be set, it will be in the billions and raised in the form of drawdown funds. Staffing and potential co-founders are in the process of being sorted out.

Smith left GSO earlier this year, several years after co-founder Doug Ostrover, who has since started Owl Rock Capital Partners with Marc Lipschultz and Craig Packer, alumni of KKR and Goldman Sachs, respectively. The firm has raised billions of dollars for multiple vehicles, including $5.5 billion for its flagship business development company, Owl Rock Capital Corporation.

The firm’s third co-founder and chairman, Bennett Goodman, is now the sole founder left at Blackstone’s credit arm. Dwight Scott was promoted to president in June 2017, a role in which he oversees management of GSO.