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Blackstone's GSO Posts Loss in Distressed Debt as Sector Sours

  • Two funds specializing in troubled issuers hobble results
  • ‘We still feel good about our distressed portfolio,’ Gray says
Bloomberg business news
Blackstone's GSO Posts Loss in Distressed Debt

GSO Capital Partners LP reported its largest loss in at least two years from its distressed-debt investments, dragged down by the scarce supply of new targets and double-digit declines at some of its biggest funds that invest in troubled companies.

The credit arm of Blackstone Group LP reported a negative 5.9 percent net return from distressed-debt strategies for the fourth quarter, citing drops in public equity stakes, turmoil in the energy industry and turbulence in overall credit markets. That compares with a 2.6 percent gain in the same quarter a year earlier and 0.1 percent in 2018’s third quarter, according to Blackstone’s earnings presentation. The full year’s net return from troubled issuers swung to a 3.4 percent loss from a 4.9 percent gain in 2017.