HONG KONG (Reuters) – GSO Capital Partners LP, Blackstone Group’s (BX.N) $25 billion credit hedge fund, is closing its Asia investment desk after failing to find attractive investments in the region, sources familiar with the matter said on Tuesday.
The four-member team, led by Asia-Pacific head Timothy Donahue, will be relocated to either London or New York, the sources said, adding that GSO’s Asia fund raising team would remain in place.
The sources, who did not want to be identified because the information was not public, said GSO was shutting its Asia desk because there were better debt and credit investment opportunities in the United States and Europe.
GSO and Blackstone could not immediately be reached for comment. GSO is a hedge fund, mezzanine fund and senior debt fund with around $25 billion under management. New York-based Blackstone, among the world’s largest private equity firms, has a half-dozen business units aside from its leveraged buyout team, including a hedge fund group.
Blackstone agreed to buy GSO in January for up to $930 million in cash and stock, at a time when frozen credit markets across the globe appeared to offer debt and credit-related securities at bargain prices.
GSO opened its Hong Kong office on Sept. 1. Shortly afterwards, Lehman Brothers filed for bankruptcy, and the financial crisis deepened, sending debt and credit markets sharply lower.
GSO’s team in Asia did not make any investments, fearful of prices falling further and lack of creditor protection across the region in such a volatile market, sources said.
GSO’s Asia team was Donahue, Managing Director Sanjeev Khemlani, Associate Angad Banga and Vice President Abhimanyu Prakash.
(Reporting by Michael Flaherty, Editing by Keiron Henderson)