By Shasha Dai Of DOW JONES LBO WIRE Texas billionaire Robert M. Bass and growth-capital-private-equity firm General Atlantic LLC have acquired stakes in credit-investment firm Oak Hill Advisors LP, in a sign that corporate debt remains in vogue among private-equity investors. Bass and General Atlantic bought out an interest held by iStar Financial Inc. (SFI), a publicly traded commercial-real-estate firm, which took a stake in New York-based Oak Hill in 2005. Oak Hill continues to be majority-owned by its senior management, including Co-Founder and President Glenn August. The firm has almost $13 billion under management. Financial details of the investment weren't disclosed. iStar didn't respond to a request for comment, nor did Bass's investment vehicle, Keystone Inc., of Fort Worth, Texas. IStar determined that corporate credit was no longer a core area for it, so the company and Oak Hill retained Citigroup Inc. (C) and Morgan Stanley to find new buyers, people familiar with the situation said. Those banks didn't respond to requests for comment. Personal ties played a part in the transaction, one person said. August has known Bill Ford, president of General Atlantic, for a long time, the person said, and was impressed by General Atlantic's global presence. In an email, General Atlantic spokeswoman Pat Hedley said the firm believes in the continued growth of "financial services and alternative investments," and that the investment will help Oak Hill to "add investors globally." Bass, a celebrated investor who helped launch the careers of David Bonderman and Jim Coulter of Texas Pacific Group, now called TPG Capital, also helped launch some of Oak Hill's first funds and has been an anchor investor in the firm for 20 years. Oak Hill's ties to Bass were cited by iStar as a key reason for the company purchasing a minority interest in Oak Hill, according to iStar's website. iStar was looking to expand into corporate debt and thought Bass's support would give Oak Hill important support. European corporate debt has been vaunted as an attractive investment area by several private-equity firms, as banks there look to trim their riskier assets and bulk up capital, making them more reluctant to lend to corporations. Several private-equity firms have acquired investment firms with that specialty. GSO Capital Partners, Blackstone Group LP's (BX) credit arm, recently bought Harbourmaster Capital, a Dublin leveraged-loan investor. H.I.G. Capital, a Miami middle-market firm, bought WhiteHorse Capital, a Dallas debt investor. (Dow Jones LBO Wire covers buyout and growth equity deals, as well as private-equity fund-raising and other news of interest to the private-equity community.) -By Shasha Dai, Dow Jones LBO Wire; 212-416-2037; shasha.dai@dowjones.com
