The Blackstone Group’s credit platform GSO Capital Partners has raised $4.5 billion for its second energy investing fund.
The firm announced Friday that public pension funds, financial institutions, endowments, foundations, and family offices helped it to reach its hard cap for the GSO Energy Select Opportunities Fund II.
The news comes at a tough time for the energy industry. According to data from alternative investment data platform Preqin, investment firms are taking longer to raise capital in the natural resources sector, and just 28 percent of institutions plan to increase their allocation to the sector this year.
GSO Capital Partners, though, highlighted its “scale, flexible capital base, and structuring expertise” as strengths in its announcement.
“A fund of this size uniquely positions GSO to provide much-needed capital to the energy industry,” said Rob Horn, senior managing director and co-head of GSO Energy, in a statement.
Meeting minutes from May 2018 show that the Tennessee Consolidated Retirement System invested $125 million in the fund. The pension fund had already invested with GSO in other funds, the minutes showed.
“The strategy will provide flexible capital to energy sector companies to be used for M&A, product development, and occasionally rescue finance,” according to TCRS’ meeting minutes. “The GSO Energy team has been successfully investing in the energy space since 2005, weathering two cycles with outstanding performance.”
The fund will be invested across all segments of the energy sector: power, renewables, and oilfield services, among other segments, according to a person familiar with the matter. This person added that the fund’s primary focus will be on midstream and upstream assets.
In April, Blackstone closed on a deal to acquire a 45 percent stake in Targa Badlands for $1.6 billion in cash, according to an announcement. Targa Resources, the parent company of Targa Badlands, is a midstream energy company. Targa Badlands holds the company’s North Dakota assets, the announcement showed.
[II Deep Dive: The Radical, Lucrative, and Controversial Company Hiding in Stephen Schwarzman’s Pocket]
GSO has completed roughly $13 billion in deals, the announcement said.
