Bloomberg News

Blackstone’s GSO Acquires Loan Manager Harbourmaster Capital

October 06, 2011

(Updates with management appointments in second paragraph.)

Oct. 6 (Bloomberg) -- GSO Capital Partners LP, the credit investment arm of Blackstone Group LP, acquired Dublin-based Harbourmaster Capital Management Ltd. to boost its European loan holdings to 11.5 billion euros ($15.5 billion).

The combined business will be managed by Debra Anderson of GSO and Alan Kerr and Mark Moffat of Harbourmaster, according to a statement from Blackstone today. Harbourmaster oversees about 8 billion euros of assets, including collateralized loan obligations, secured bank loans and investment grade infrastructure loans and bonds, according to its website.

The downturn in the CLO market in Europe is providing a window for firms including GSO Capital, NM Rothschild and Ares Management LLC to expand by taking over smaller funds, which are struggling to raise capital amid Europe’s deepening debt crisis.

“We are definitely seeing a continuing trend in loan fund consolidation, and even the largest managers are not immune,” said Alastair Sewell, associate director in Fitch Rating’s fund and asset manager rating team in London.

Rothschild, the family-owned financial advisor, took over Elgin Capital LLP in August to triple its European leveraged loans under management to about 2 billion euros. The same month, Ares, a Los Angeles-based investment firm, agreed to buy Indicus Advisors in London, increasing its European corporate credit under management to more than $5 billion.

Highland Capital Management LLP, the Dallas-based debt manager, has put its European CLO portfolios for sale, according to two people familiar with the discussions.

CLOs are a type of collateralized debt obligation that pool high-yield, high-risk loans and slice them into securities of varying risk and return. Issuance of the debt in Europe has declined to 285 million euros this year compared with a record 35 billion euros in 2007, according to Bloomberg data.

Harbourmaster’s acquisition is expected to close in early 2012 once regulatory approval is secured, the company said. Terms of the transaction were not disclosed.

--Editors: Cecile Gutscher, Chapin Wright

To contact the reporter on this story: Stephen Morris in London at smorris39@bloomberg.net.

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net.


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