Blackstone risks hedge fund returns as LBO loans fade

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 US 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