PE fund briefs, week of Jan. 25, 2010

Blackstone takes over some Allied Capital funds


Blackstone Group said last week that will take over management of nine leveraged loan and high yield bond funds with assets of $3.2 billion from business development company Allied Capital Corp.

The purchase price was not disclosed.

GSO Capital Partners, Blackstone’s credit business, is buying the collateral management agreements for the nine collateralized debt obligation (CDOs) and collateralized loan obligation (CLO) funds currently managed by Callidus, a portfolio company of Allied Capital.

The acquisitions come as investors are looking for a revival in structured bond products that contributed to the global financial crisis. Some credit investors say a revival in those complex bond markets is needed before more liquidity and a strong recovery can take root.

CDOs backed by subprime and residential mortgage-backed securities may never come back, many analysts say, but some investors are looking for opportunities, particularly in CLOs backed by loans and higher quality bonds.

CLOs, opaque and complex investment vehicles, give investors access to leveraged loans in the form of a security. They were a popular tool for lenders to offload risk to the capital markets and a driver of the buyout boom up until mid-2007. —Walden Siew, Reuters

UK firm locks up eighth fund

CBPE Capital, a U.K.-based mid-market private equity firm, has closed its eighth fund with about $655 million in capital commitments.

The firm began fund-raising in the fourth quarter of 2008, and it held a first close in April 2009 with about $440 million in commitments.

The firm raised $580 million for its seventh fund, which closed in 2004.