GSO Capital Partners, Blackstone Group's USD25bn billion credit hedge fund management business, has revealed that it is planning to close its Asia investment desk just a few months after establishing it, having failed to find attractive opportunities in the region.

New York-based GSO hasn't bought any Asian bonds or loans since it opened its Hong Kong office in September because it believes prices are too high, according to Bloomberg. Other reports suggest that the Blackstone-owned manager is planning to focus instead on more attractive debt and credit investment opportunities in US and Europe.

It's just a year since Blackstone agreed to buy GSO for up to USD930m in cash and stock, at a time when many alternative investment groups were salivating over the opportunities apparently in prospect in distressed investments. However, the worsening of the credit crisis over the course of 2008 upset everyone's calculations. GSO had barely opened in Hong Kong when Lehman Brothers filed for bankruptcy, tipping the entire global financial industry into a downward spiral.

Blackstone is not along among alternative investment managers in deciding that right now, the much-anticipated potential for growth in Asia is off the agenda for the present. Another private equity giant, the Carlyle Group, announced last November it would shut its Asian leveraged finance investment unit because of a lack of acquisition opportunities.

Just a few months ago pundits were postulating that as Europe and North America staggered under the impact of the credit crunch and fast-deepening economic recession, Asia was poised to take up the slack. But now, some of the world's canniest investors are giving up on the region, at least for now, as the financial tsunami continues to take its toll throughout the globe.