The path to private credit
In January 2008, Blackstone acquired GSO Capital Partners, an alternative asset manager that specialized in leveraged finance, for $1 billion. At the time, GSO had approximately $10 billion in AUM across a multi-strategy credit hedge fund, a mezzanine fund, a senior debt fund, and various Collateralized Loan Obligation (CLO) vehicles. Hamilton James, Blackstone’s president, noted that the GSO acquisition would bring “superb market knowledge, depth of talent, and experience to an outstanding team in place here at Blackstone. By accessing our considerable private equity and other resources, we expect this group to generate substantial incremental value…"
Blackstone had gone public barely six months before, spearheading the trend of large private equity firms listing on major exchanges.
Growth through adjacencies
The acquisition of GSO was the latest step in Blackstone’s history of growth through adjacencies. Initially founded as an M&A advisory firm in 1985, the principals, Steven Schwarzman and Peter Peterson, raised a private equity fund in 1987. In 1992, having invested in several companies with substantial real estate holdings, Blackstone raised its first real estate fund. After providing hedge fund services to its senior employees, the firm went on to raise several hedge funds in the mid-1990s.
As the firm considered a public listing, it needed to smooth out its revenue streams by diversifying into asset classes with more consistent returns. Enter private credit.
Benefits of the credit operation
Expanding into credit allowed the firm to provide debt to companies in the Blackstone portfolio, as well as funding for acquisitions made by other firms. For instance, on September 15, 2008 (the day of the Lehman Brothers’ collapse), Blackstone, Bain Capital, and NBC Universal completed the acquisition of The Weather Channel. Part of the funding came from Blackstone’s internal credit operation. One investor who participated in the deal said, “Generally, the credit operation doesn’t fund Blackstone deals. But in a situation like this, when the banking system had essentially shut down, having that access to capital meant we could finance the transaction.”
Blackstone’s credit operations today
Just as Blackstone started with real estate and credit as one-off offerings, so it did with its sub-verticals within credit. Gilles Dellaert, the head of Blackstone’s credit and insurance operations, said, “Everything we offer today in credit started as one-off offerings. We built them patiently and purposefully. At Blackstone, we have the luxury of doing that on the back of established equity-investing businesses.”
These established equity-investing businesses include Blackstone’s infrastructure and real estate businesses. The firm’s $53 billion infrastructure investment business provides introductions and market knowledge for the infrastructure lending business, while real estate loans can arise from relationships created through the $600 billion global real estate portfolio. At the same time, Blackstone’s credit function supplies insights into financial market trends to the entire firm.
In 2021, Blackstone introduced the BCRED private credit fund to its private wealth customers. This fund provided “floating rate, senior secured loans to large, performing companies in historically resilient sectors.”
As of June 30, 2025, AUM across the credit platform had reached $484 billion in practices, including private corporate credit, liquid corporate credit, infrastructure and asset-based credit, and real estate credit–40% of the firm’s entire $1.2 trillion AUM.
As Blackstone looks into the next decades, the firm regards private credit as a major service for its portfolio companies, its LPs, and its retail customers, in addition to providing useful intelligence on credit market trends. These same benefits can accrue to other firms seeking to offer a broader suite of services with a less volatile return profile.