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FS Investments to Launch Another Interval Fund

FS Investments, a sponsor of alternative investment funds formerly known as Franklin Square Capital Partners, is launching a $1 billion interval fund called FS Diversified Income Fund, according to a preliminary prospectus filed with the Securities and Exchange Commission.

This is the second interval fund FS Investments registered in recent months – In October, the firm registered FS Energy Total Return Fund, a $2 billion fund that plans to invest in natural resource companies.

FS Diversified Income Fund intends to invest its assets primarily in income-producing debt investments, focusing on pursuing opportunities in North America, Europe and emerging markets. The fund’s advisor, FS Diversified Income Advisor, is responsible for making investment decisions for the portfolio. The sub-advisor was not yet disclosed.

The fund plans to offer 40 million class A, class C, and class I shares on a continuous basis that will be sold through FS Investment Solutions, a registered broker-dealer and an affiliate of FS Diversified Income Advisor. Initially, shares are expected to be priced at $25.00 per share.

Class A shares have a front-end sales load of up to 5.75 percent and a shareholder servicing fee of 0.25 percent. The sales load depends on the amount purchased and may range from 0 to 5.75 percent, with up to 0.75 percent paid as a fee to the fund’s dealer manager, FS Solutions.

Class C shares have no front-end sales load, and include a 0.25 percent shareholder servicing fee and a 0.75 percent distribution fee. Class C shareholders may be charged a 1 percent contingent deferred sales fee for shares redeemed within the first 365 days of their purchase. The distributor plans to pay 1 percent to dealers who sell class C shares.

Class I shares have no sales load or other fees. FS Diversified Income Fund intends to conduct a private placement of Class I Shares to certain board members and other FS Investments affiliates who intend to purchase an undetermined number shares.

Class A and class C shares have a minimum initial investment of $2,500 for regular accounts and $1,000 for retirement plan accounts. The minimum initial investment for class I shares is not yet determined.

For more FS Investments news, visit their directory page here.