FS Investments, KKR floats $18 billion business dev. coy

FS Investments, KKR floats $18 billion business dev. coy

FS Investments alongside KKR said they have partnered to create the market’s largest business development company (BDC) platform, with $18 billion in combined assets under management.

The company said “Effective today, a new partnership, FS/KKR Advisor, LLC, will serve as the investment adviser to six BDCs: FS Investment Corporation (NYSE: FSIC), FS Investment Corporation II (FSIC II), FS Investment Corporation III (FSIC III), FS Investment Corporation IV (FSIC IV), Corporate Capital Trust, Inc. (NYSE: CCT) and Corporate Capital Trust II (CCT II). All of the BDCs are able to participate in the same transactions alongside each other and KKR Credit’s institutional funds and accounts.

“We have been working closely with the KKR team over the past several months to prepare for this transition and are now looking forward to realizing the full benefits of our combined platform for investors,” said Michael Forman, Chairman and Chief Executive Officer of FS Investments. “Our focus will continue to be on optimizing the platform and enhancing performance as we also evaluate potential mergers of these BDCs to create value.”

Todd Builione, President of KKR Credit and Markets, said, “We have enjoyed working with our partners at FS over the past many months. We firmly believe that through our collective scale and complementary expertise, our combined BDC franchise is positioned to drive superior results for our investors – and holistic financing solutions to our sponsor and corporate clients.”

FS Investments and GSO Capital Partners (GSO) have concluded their relationship with respect to all of FS Investments’ sponsored funds that were sub-advised by GSO.

FS/KKR Advisor, LLC is a partnership between FS Investments and KKR Credit that serves as the investment adviser to six business development companies (BDCs) with approximately $18 billion in assets under management as of December 31, 2017.

The BDCs managed by FS/KKR include FS Investment Corporation, FS Investment Corporation II, FS Investment Corporation III, FS Investment Corporation IV, Corporate Capital Trust, Inc. and Corporate Capital Trust II.