Reuters – GSO Capital Partners LP, Blackstone Group’s $25 billion credit hedge fund, is closing its Asia investment desk after failing to find attractive investments in the region, sources familiar with the matter said on Tuesday.

The four-member team, led by Asia-Pacific head Timothy Donahue, will be relocated to either London or New York, the sources said, adding that GSO’s Asia fund raising team would remain in place.

The sources, who did not want to be identified because the information was not public, said GSO was shutting its Asia desk because there were better debt and credit investment opportunities in the United States and Europe.

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Bloomberg- When Blackstone Group LP, the world’s biggest buyout firm, was pursuing the takeover of the Weather Channel cable network earlier this month with General Electric Co. and Bain Capital LLC, Wall Street balked at providing financing.

So the New York-based company turned to GSO Capital Partners LP, the hedge-fund manager it acquired in March, to pull off the largest U.S. leveraged buyout this year.

Blackstone can’t wait for banks, stuck with almost $100 billion of debt from earlier LBOs, to start lending again. Instead, it’s pushing deeper into deal financing with GSO. The strategy may hurt the hedge-fund unit’s returns — some approaching 40 percent — if slowing economies lead companies taken private by Blackstone to default on their debt.

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