GSO Capital Partners (GSO) was founded in 2005 by credit experts Kevin Goodman, Tripp Smith, and Bennett Ostrover, who previously worked at firms like DLJ and Credit Suisse First Boston (with Source A noting they came from Deutsche Bank, which may reflect different career stages or team backgrounds). The firm specialized in high-yield debt, distressed securities, and alternative credit strategies, providing capital to non-investment-grade cyclical companies with tangible assets as collateral. GSO quickly grew by acquiring a small collateralized loan obligation (CLO) group from Royal Bank of Canada and launching hedge funds focused on special situations, mezzanine debt, and rescue financing. It emerged as a major player in the leveraged finance marketplace, filling financing voids left by banks and hedge funds post-2008 financial crisis, and was an early investor in sectors like shale gas.

In January 2008, Blackstone Group acquired GSO for $1 billion when it managed approximately $10 billion in assets under management (AUM) across multi-strategy credit hedge funds, mezzanine funds, senior debt funds, and CLO vehicles. This acquisition integrated GSO as Blackstone's credit investment arm, expanding the firm's capabilities in private credit and allowing it to fund portfolio companies and acquisitions, such as the 2008 purchase of The Weather Channel. Under Blackstone, GSO's AUM ballooned to nearly $130 billion by the mid-2010s, though it faced cultural integration challenges and executive departures. In 2017, Blackstone shuttered its distressed hedge fund operations within GSO, leading some executives to leave, but the core credit platform persisted as part of Blackstone's broader alternative asset management.

Today, GSO operates as the global credit investment platform of Blackstone, with offices in New York, London, and Hong Kong, managing around $79 billion in AUM as of recent reports. It continues to invest in CLOs, secured loans, and opportunistic credit strategies, maintaining its role as one of the largest credit-oriented alternative asset managers worldwide. The firm's approach emphasizes capital protection and extending credit to organizations in need, echoing the legacy of junk bond pioneers like Drexel Burnham Lambert.