Private equity giant The Blackstone Group (NYSE: BX) has filed registration documents with the Securities and Exchange Commission for a new interval fund, the Blackstone/GSO Floating Rate Enhanced Income Fund. The preliminary prospectus did not disclose the maximum amount being registered.
Blackstone/GSO Floating Rate Enhanced Income Fund plans to invest at least 80 percent of its assets in floating rate loans, and may invest up to 20 percent in structured products, derivatives, warrants and equity securities, fixed rate debt. The company noted that substantially all of its assets may be invested in instruments that are below investment grade quality.
The Blackstone/GSO Fund is structured as a ’40 Act interval fund and offers individual investors periodic liquidity due to its obligation to repurchase a limited number of shares at certain intervals.
GSO/Blackstone Debt Funds Management LLC serves as the fund’s investment adviser and will also provide administrative and compliance oversight services. The adviser is a subsidiary of registered investment adviser GSO Capital Partners LP, the credit platform of The Blackstone Group.
The fund plans to offer two share classes, Class T shares for brokerage accounts and Class I shares for advisory accounts, with a minimum initial investment of $10,000 per account and in increments of $1,000 thereafter.
Class T shares have a front-end sales load of 2.5 percent, and selling agents may reduce or waive the sales load at their discretion. An annual 0.25 percent service fee will be paid to Blackstone Advisory Partners L.P., the fund’s principal underwriter and distributor, who may pay all or a portion of the fee to selling agents that sell Class T shares.
Class I shares have no sales load or service fee, but both share classes are subject to an annual 1 percent management fee paid to the fund’s advisor.
The fund seeks to make monthly repurchase offers of 5 percent of the fund’s outstanding common shares at net asset value, however shares held for less than one year may be subject to a 2 percent repurchase fee.
Blackstone’s business is organized into four segments: private equity, real estate, hedge fund solutions and credit. The company recently launched its first non-traded REIT, Blackstone Real Estate Income Trust.
Through its different investment businesses, as of March 31, 2017, Blackstone had total assets under management of approximately $368.2 billion, and GSO’s asset management operation had approximately $93.1 billion in assets under management.