Alternative investment manager FS Investments has launched its first closed-end interval fund, FS Energy Total Return Fund, which seeks to generate an attractive total return by investing in the equity and debt securities of public and private energy and energy infrastructure companies.
FS Investments already manages more than USD5 billion of energy and power assets, with a focus on directly originated private debt investments.
“FS Investments looks for ways to help investors access alternative sources of income and growth in the market, and we believe the energy industry has great long-term fundamentals if you have the flexibility to invest selectively across the entire sector and capital structure,” says Michael C Forman (pictured), chairman and chief executive officer of FS Investments.
FS Investments believes changing sources of energy supply, ageing energy infrastructure, merger and acquisition activity in the sector, and commodity price volatility have created an attractive environment for investing in energy and energy infrastructure companies.
FS Energy Total Return Fund seeks to capitalise on these favourable market conditions through what it believes are its key competitive advantages, which include an experienced senior management team, a flexible investment mandate across all energy sub-sectors and capital structures, a fund structure that supports a long-term investment horizon, and a differentiated investment process that aims to manage macroeconomic and commodity price risk.
“We always seek to match a fund’s structure with its investment strategy,” adds Mike Kelly, chief investment officer of FS Investments. “FS Energy Total Return Fund has a broad investment mandate and while a primary focus of the fund will be in liquid equity securities, as an interval fund, it maintains the ability to invest in less liquid securities that have the potential for outperformance.”
FS Investments has selected Magnetar Asset Management as the investment sub-adviser for the fund. Magnetar is part of an Illinois-based alternative asset management group with a strong track record of investing in the energy sector. For more than 10 years, Magnetar’s energy team has actively invested in the North American energy markets and manages approximately USD4.3 billion of investor capital in private funds and institutional accounts.
