GSO posts solid Q4

Blackstone’s credit affiliate generated a 33.1% gross return through its rescue lending funds on the year. 

The Blackstone Group’s credit affiliate GSO closed out 2013 in strong fashion.

The firm’s mezzanine and rescue lending funds grossed 3.9 percent and 11.8 percent for the quarter, respectively, fueling year-end gross returns of 25.6 percent and 33.1 percent, according to an earnings report released on Thursday.

Blackstone’s credit affiliate, GSO, closed on $1.8 billion in commitments during the quarter thanks to “new product launches”. GSO’s assets under management grew to $65 billion, a 15 percent increase over the previous year.

The credit platform generated $880 million in revenue in 2013, driven largely by the $457.1 million it collected in performance fees. Total credit-related revenue improved by 13 percent over the firm’s 2013 total. Blackstone also collected $405 million in fees unrelated to performance.

The firm’s credit business is dominated by its $20.6 billion in CLO assets and $20.7 billion in customised credit strategies, which include business development companies, close-end funds, co-mingled funds, exchange traded funds and separate accounts. The firm has approximately $17.4 billion AUM in its mezzanine and rescue lending funds and $6.4 billion through hedge fund strategies.

Blackstone’s total AUM grew by 26 percent to $266 billion last year. Its investment funds, which include real estate and private equity strategies, returned $38 billion to investors in 2013.

“Our record results in 2013 illustrate how our long-term fund structures benefit our investors, and how our patient approach toward improving assets can ultimately drive better earnings growth and fund performance,” chairman and founder Stephen Schwarzman said in a statement.