Blackstone GSO Customized Credit Strategies Interview

You've got a good picture of what GSO does, they manage CLOs, loan mutual funds, middle-market and mezzanine funds, distressed funds, etc.

I have not specifically heard of customized credit strategies within GSO, but based on the description it sounds like a managed-account business.

A lot of managed account businesses in the credit world take the form of total-return swap ("TRS") funds, which are a type of structure that uses leverage from a counter-party to increase returns to the equity like a CLO with the difference being that the collateral is marked to market and subject to margin calls. This is where the "structured vehicle" part from the website blurb comes in.

It's basically the same in concept as a margin account with a prime broker, but depending on the collateral you can get a lot more turns of leverage and it's sometimes cheaper. Collateral is often only senior secured loans but some TRS indentures allow for bonds, structured notes, etc (this is where the "We also invest in the debt and equity tranches of CLOs managed by selected third parties" comes in to play")

I would definitely study up on how CLOs and loans work, and if you can learn how a TRS works and how it's different from a CLO I think that would probably impress them. Note that there are two usages for TRS-one is in the sense of a single trade, where you take a levered position with a counterparty via a TRS, and one is in the sense of a fund that uses a series of TRS to lever the overall fund. Another thing to understand is what a BDC is/how it's taxed.

Feel free to PM me if you have specific questions.