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Blackstone readies CLO fund with 8% yield target

by Robert St George on Jul 11, 2014 at 14:22

Blackstone readies CLO fund with 8% yield target

Blackstone is seeking to raise more than £150 million for a new closed-ended fund focused on collateralised loan obligations (CLOs).

The Blackstone GSO Loan Financing fund is expected to launch on 23 July, and will invest predominantly in European senior secured loans and subordinated tranches of debt issued through CLOs.

The fund will be run by Blackstone’s credit subsidiary, GSO Capital Partners, which is the world’s largest manager of CLOs with £12.5 billion of assets under management.

The strategy is targeting an annual dividend yield of 8%, with a ‘mid-teen total return over the medium term’.

GSO will initially concentrate on European senior secured loans for the portfolio, but ‘in due course’ may expand this to include US senior secured loans.

The fund’s total annual expenses are expected to be 0.45%.

Last month another closed-ended CLO fund, Fair Oaks Income , raised £65 million after seeking more than £100 million. It is targeting a minimum dividend yield of Libor plus 6.75%, with a net total return of 12-14% a year.

Fair Oaks is also headed by two GSO alumni, Miguel Ramos Fuentenebro and Roger Coyle.

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