| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 32.60 | 183 |
| Intrinsic value (DCF) | 7.04 | -39 |
| Graham-Dodd Method | 1.07 | -91 |
| Graham Formula | 12.40 | 8 |
Blackstone / GSO Long-Short Credit Income Fund (NYSE: BGX) is a closed-end fixed income mutual fund managed by GSO / Blackstone Debt Funds Management LLC, a subsidiary of The Blackstone Group LP. Launched in 2010, BGX employs a long-short credit strategy to invest primarily in below-investment-grade corporate debt, including secured loans and high-yield bonds across diversified sectors. The fund leverages fundamental credit analysis and a research-driven approach to generate income and capital appreciation while managing risk. BGX benchmarks its performance against a composite index (70% S&P/LSTA Leveraged Loan Index and 30% Barclays US High Yield Index), appealing to investors seeking exposure to leveraged credit markets with active management. With a focus on non-investment-grade debt, BGX provides access to a niche segment of the fixed-income market, benefiting from Blackstone’s deep credit expertise and institutional resources. The fund’s strategy is particularly relevant in volatile or rising rate environments, where active credit selection can enhance returns.
BGX offers investors exposure to high-yield and leveraged loan markets through an actively managed, long-short credit strategy, backed by Blackstone’s institutional credit platform. The fund’s focus on below-investment-grade debt provides attractive yield potential, though it carries higher credit and liquidity risks. With a trailing dividend yield of ~9.1% (based on a $1.167 annualized dividend and recent share price), BGX may appeal to income-focused investors, but its performance is sensitive to credit spreads and economic cycles. The fund’s low beta (0.45) suggests relative insulation from broad equity market swings, but its reliance on leveraged loans and high-yield bonds exposes it to default risks in downturns. The absence of leverage (zero debt) is a positive, but the closed-end structure may lead to trading at premiums/discounts to NAV. Competent management by GSO/Blackstone is a key strength, but fee structures and market conditions warrant close monitoring.
BGX differentiates itself through its long-short credit strategy, allowing flexibility to capitalize on mispriced credit opportunities while hedging downside risks. Blackstone’s GSO platform provides access to proprietary research, deal flow, and restructuring expertise—advantages that most standalone credit funds lack. The fund’s focus on secured loans (first/second lien) offers collateral protection, while its ability to short overvalued credits adds a tactical edge. However, BGX competes in a crowded space of high-yield and leveraged loan funds, where scale and cost efficiency matter. Its closed-end structure limits liquidity compared to open-end peers, and its expense ratio (not disclosed here) could erode returns if not competitive. The fund’s niche is attractive for investors seeking active management in leveraged credit, but passive ETFs (e.g., HYG, JNK) pose competition with lower fees. BGX’s performance hinges on GSO’s credit selection, which has historically been robust but faces challenges in late-cycle environments where defaults may rise. The fund’s small size (~$154M AUM) may limit diversification but allows for agility in trading less liquid instruments.