Blackstone Puts a Quantitative Spin on Its Credit Business

The investing giant has agreed to acquire $7.5 billion quantitative credit firm DCI.

Mark Abramson/Bloomberg

Mark Abramson/Bloomberg

Blackstone Group is bringing quantitative strategies into its credit business.

The asset management firm on Monday announced an agreement to acquire DCI, a $7.5 billion credit shop that uses a systematic approach to invest in investment grade, high yield, and emerging corporate credit.

Blackstone said DCI would become part of Blackstone Credit, the $135 billion investment business previously known as GSO Capital Partners.

In the statement announcing the news, Blackstone described the DCI team as “recognized experts in quantitative and systematic fixed income research.” The firm added that the purchase will allow Blackstone to adopt DCI’s models and technology for credit investing.

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In addition, Blackstone said the acquisition will improve its high-yield and investment grade credit capabilities.

“DCI has a more than 15-year track record of developing and applying technology-driven strategies and is at the forefront of the evolution towards quantitative investing in the corporate bond market,” Dwight Scott, global head of Blackstone Credit, said in a statement. “DCI will strengthen and differentiate the solutions we provide to our retail, institutional, and insurance clients.”

DCI was co-founded in 2004 by Stephen Kealhofer, Mac McQuown, and David Solo. It manages long-only and long-short strategies using a fundamental-based, systematic model.