GSO CAPITAL Partners, the credit investment arm of Blackstone Group, acquired Dublin-based Harbourmaster Capital Management Ltd to boost its European loan holdings to €11.5 billion.
The combined business will be managed by Debra Anderson of GSO and Alan Kerr and Mark Moffat of Harbourmaster, a statement from Blackstone said.
Harbourmaster oversees about €8 billion of assets, including collateralised loan obligations (CLOs), secured bank loans and investment grade infrastructure loans and bonds, its website says.
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 adviser, took over Elgin Capital LLP in August to triple its European leveraged loans under management to about €2 billion.
That 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 (€3.7 billion). Dallas-based debt manager Highland Capital Management LLP has put its European CLO portfolios for sale, two people familiar with the negotiations say.
CLOs are a type of collateralised debt obligation that pools high-yield, high-risk loans and slices them into securities of varying risk and return. Issuance of the debt in Europe has declined to €285 million this year compared to a record €35 billion in 2007, according to Bloomberg data.
Harbourmaster’s acquisition is expected to close in early 2012 once regulatory approval is secured, the firm said. Terms of the transaction were not disclosed.
