Blackstone raises up to $960 million for retail credit fund

Diversified alternative asset managers take money from large institutional investors, such as pension plans and sovereign wealth funds, to invest in a range of credit products, from high-yield bonds to senior loans.

Launching mutual funds allows asset managers to pocket more fees from much larger swathes of the investment community through up-and-running platforms. Blackstone's credit businesses had $50.5 billion of assets under management at the end of June.

The new fund, dubbed Blackstone/GSO Strategic Credit Fund , raised $834.8 million in an initial public offering, or $960 million assuming the full exercise of the underwriters' overallotment option, which is not certain, Blackstone said.

The fund's primary objective is to seek high current income, with a secondary goal of preserving capital, Blackstone added.

Blackstone has two more closed-end mutual funds that are publicly listed - the Blackstone/GSO Long-Short Credit Income Fund and the Blackstone/GSO Senior Floating Rate Term Fund .

Competitor Apollo Global Management LLC also runs a closed-end listed fund, the Apollo Senior Floating Rate Fund . In July, KKR & Co LP submitted regulatory filings to market two mutual funds that will invest in credit products, playing catch-up with Blackstone and Apollo.

Morgan Stanley , Citigroup Inc , Bank of America Merrill Lynch , UBS Investment Bank and Wells Fargo Securities were lead managers of the common share underwriting syndicate for Blackstone/GSO Strategic Credit Fund.

(Reporting by Greg Roumeliotis in New York)

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