Blackstone Group's ( BX) purchase of hedge fund GSO Capital Thursday may provide the high-profile leveraged buyout shop run by CEO Stephen Schwarzman with one invaluable benefit in a market still frozen by credit fears: financing.

With banks caught up in the credit crisis and worried about unloading hundreds of billions in leveraged loans -- not to mention subprime paper -- the purchase of credit-focused GSO Capital could prove a novel way for the private equity firm to finance investments hung up on loans big banks and brokerages might be inclined to shun.

Founded by former Credit Suisse ( CS) executive Bennett Goodman, GSO Capital underscored its ability to serve as a financing alternative when it and Farallon Capital Management provided private equity firm Hellman & Friedman with $500 million in commitments for senior subordinated financing in October. Hellman needed the financing for its nearly $2.7 billion offer for Goodman Global, a leading commercial heating, ventilation and air conditioning company.

For Blackstone, a source of steady funding amid the credit crisis also means it won't be beholden to creditors such as JPMorgan Chase ( JPM), Goldman Sachs ( GS), Lehman Brothers ( LEH), Bank of America ( BAC) and Merrill Lynch ( MER).

The perception that deal flow would be significantly pinched in the coming years as banks attempt to unwind their leveraged loan portfolios has particularly hit Blackstone's shares. The firm has lost around 40% of its value since it priced its IPO to much fanfare in the summer. Blackstone's shares were up 9.6% at $19.84 Thursday on the heels of its acquisition of GSO, a deal worth up to $930 million.

Many private equity shops are finding that they have to had to unwind leveraged buyouts drawn up prior to the market bust, because they no longer make economic sense, or their lenders are balking.

Earlier in the month, Blackstone was forced to back out of a $1.8 billion agreement it had jointly forged with General Electric ( GE) Capital to purchase lender PHH Corp ( PHH). Blackstone suggested that its bankers were the cause of the demise of the deal.

PHH is seeking a $50 million termination fee from Blackstone, but more importantly, such aborted deals can undermine the firm's credibility in the future. Moreover, private equity firms like Blackstone have raised massive war chests to make purchases and must put that capital to work, regardless of an unwieldy credit market.

GSO Capital also has a large focus on distressed investing, which is likely to be a highly coveted skill in today's market.