JPMorgan veteran to replace GSO COO George Fan – exclusive

Paul Kelly joins the credit management behemoth as it is launching its new BDC, Blackstone / GSO Secured Lending Fund.

GSO Capital Partners chief operating officer George Fan is leaving this month and will be replaced by Paul Kelly, who previously held senior and executive level roles at JPMorgan, according to a source familiar with the situation.

Kelly’s oversight includes the finance, technology, operations, group strategy and planning and analysis functions of GSO, according to his biography. He will also hold the title of senior managing director at Blackstone.

A spokeswoman for New York-based GSO confirmed Kelly’s hire but declined to comment on Fan’s departure.

Fan has been with GSO since 2005, the year the firm was founded and when it was a standalone entity. Blackstone acquired GSO in 2008, when the credit manager had around $10 billion of assets under management – a figure that has since soared to $130.6 billion, as of 30 September.

Previously, Fan was at Donaldson Lufkin & Jenrette and became a part of Credit Suisse First Boston upon its acquisition of DLJ, where he worked alongside GSO co-founders Bennett Goodman, Tripp Smith and Doug Ostrover (Goodman remains at GSO, while Smith and Ostrover have departed).

At Credit Suisse First Boston, Fan worked in the legal and compliance department where he oversaw the financial sponsors group of the corporate and investment banking division.

For his part, Kelly most recently was a managing director at JPMorgan and the global head of its corporate and investment bank’s strategic market infrastructure group. Before that, he was the chief financial officer in the global commodities group, chief executive of EcoSecurities and global portfolio manager for the commodities principal investment group at the New York-based financial institution.

Kelly will have an integral role in building out the firm’s new business development company, Blackstone / GSO Secured Lending Fund, the centerpiece of its new direct lending platform. In December 2017, GSO parted ways with FS Investment Corporation, the BDC that had served as GSO’s direct lending platform.

GSO has since raised $2.6 billion for its new direct lending product. The firm submitted its notice to the Securities and Exchange Commission to have the SLF regulated as a BDC in October. Earlier this month, the firm had invested about $598 million – some 98.7 percent in first-lien senior secured and unitranche loans, according to an SEC filing.

In addition to direct lending, GSO invests in distressed debt, mezzanine debt and manages collateralised loan obligation, among other strategies.