FS Investment Corporation IV (FSIC IV), a new business development company sponsored by Franklin Square Capital Partners (Franklin Square), has registered for public sale in a continuous offering up to 250 million shares of common stock.
FSIC IV is a publicly registered, non-traded business development company (BDC) focused on investing primarily in the senior secured debt of private middle market US companies, with the investment objective of generating current income and, to a lesser extent, long-term capital appreciation. It is one of the first BDCs to launch with a commission structure that is responsive to FINRA Regulatory Notice 15-02, lowering both upfront and all-in distribution fees, while seeking to align the interests of financial advisors, investors and the sponsor.
FSIC IV launched with over USD9.1 million in capital, which included a meaningful sponsor commitment from affiliates of Franklin Square and FSIC IV’s investment sub-adviser, GSO/Blackstone Debt Funds Management LLC (GSO/Blackstone). GSO/Blackstone is an affiliate of GSO Capital Partners LP (GSO), the credit platform of Blackstone.
Building on the success of its predecessor funds, FS Investment Corporation (NYSE: FSIC), FS Investment Corporation II (FSIC II) and FS Investment Corporation III (FSIC III), FSIC IV will seek to provide investors with a stable level of income and reduce overall portfolio volatility by targeting investments in private US middle market companies. FSIC, Franklin Square’s inaugural fund and the industry’s first non-traded BDC, listed its shares on the New York Stock Exchange on April 16, 2014, marking the first such liquidity event for a non-traded BDC. As a successor fund, FSIC IV intends to provide customised financing solutions to private US middle market companies through the direct lending platform of GSO/Blackstone.
“We are pleased to launch the fourth generation of our core income fund franchise,” says Michael C Forman, Chairman and Chief Executive Officer of FSIC IV. “Just as Franklin Square pioneered the industry’s first non-traded BDC, we believe FSIC IV combines the leading capabilities of our direct origination investment platform with an innovative commission structure that meets the needs of financial advisors and investors.”
