Blackstone/GSO registered a new interval fund on June 30. The Blackstone/GSO Floating Rate Enhanced Income Fund intends to follow a familiar credit strategy, focused on floating rate loans in a rising interest rate environment. It may also invest 20% of assets into structured products, warrants/equity securities, and other related instruments.
Blackstone’s interval fund will have two share classes, one for advisory accounts, and one for brokerage accounts. The brokerage shares will have a 2.5% sales load along with a 0.25% service fee. Both share classes will be subject to a 2.0% repurchase fee. The management fee will be 1.0%. The draft prospectus does not yet specify the maximum offering amount.
According to the Prospectus: the fund will invest at least 80% of its assets in floating rate instruments, primarily floating rate loans. Additionally, the fund may invest up to 20% of its assets in structured products such as CLOs, floating rate mortgage-backed securities, and credit linked notes. Finally, the fund is allowed to invest in warrants or other securities, mainly in connection with reorganizations. The Fund may invest in securities of any credit quality, maturity and duration. The fund intends to invest substantially all of its assets in below investment grade securities.
Blackstone and retail investors
Blackstone is the subadvisor for the highly successful FS Investments BDCs. However, FS Investments and Blacsktone are now offering interval funds separately. Magnetar Capital serves as the subadvisor for FS Energy Total Return Fund, and GoldenTree is the subadvisor for the FS Credit Income Fund (formerly FS Diversified Income Fund)
This past year, Blackstone entered the non-traded REIT space, and quickly came to dominate fundraising in the retail broker-dealer channel. Blackstone has traditionally focused mainly on institutional investors, although it does sponsor several closed end funds, and traded REITs.