GSO targets $5 bln for second energy credit fund

  • New fund to invest in companies valued up to $2 bln
  • Previous fund netting IRRs in excess of 21 pct as of Dec. 31
  • Energy credit team led by Robert Horn, Michael Zawadzki

GSO Capital Partners, Blackstone Group’s credit arm, is raising a $5 billion fund to invest in the credit structures of energy companies, an LP due-diligence memo obtained by Buyouts shows.

GSO Energy Select Opportunities Fund II is expected to make 15 to 25 investments in companies valued between $1 billion and $2 billion, a Hamilton Lane report prepared for Teachers’ Retirement System of Louisiana says.

Louisiana Teachers’ $20 billion retirement system committed up to $75 million to the fund at its meeting last week.

GSO’s previous energy fund, which raised $2.9 billion in 2015, is scheduled to wrap up its investment period in November, the firm’s Q4 earnings report says.

Through Dec. 31, Hamilton Lane marked Fund I as netting a 21.3 percent internal rate of return and 1.2x multiple.

GSO’s energy team is led by Senior Managing Directors Robert Horn and Michael Zawadzki. Dwight Scott had led the firm’s investment team until last year, when he was promoted to president of GSO. He is expected to play an active role in directing Fund II’s investments, the Hamilton Lane report says.

Scott, Horn and Zawadzki sit on the fund’s investment committee with GSO Co-Founder Bennett Goodman, according to the Hamilton Lane memo.

Tripp Smith, another GSO co-founder, was expected to take the fifth seat on Fund II’s investment committee. GSO, which Blackstone acquired in 2008, recently told its limited partners that Smith in June would leave the firm to pursue other opportunities, Buyouts previously reported. The firm did not appoint a successor for Smith. 

Blackstone declined comment.

GSO managed $138.1 billion of assets as of Dec. 31. The firm raised $6.7 billion of investor capital in 2017.

Action Item: For more on Blackstone and GSO, visit

An oil pump of Cuba’s state-run CUPET is pictured, near the coast, on the outskirts of Havana on July 11, 2014.  REUTERS/Enrique De La Osa