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FS Credit Income Fund Announces Substantial Distribution Rate Increases Across Share Classes

By Mari Nicholson

FS Credit Income Fund Announces Substantial Distribution Rate Increases Across Share Classes

FS Credit Income Fund, an alternative credit strategy sponsored by FS Investments, is increasing the annualized distribution for all its share classes effective with the payment of the monthly distribution on Jan. 31, 2025.

  • The distribution rate for Class I shares will increase to 10.03% based on the fund’s net asset value per share as of Dec. 31, 2024, representing an approximate 16.89% increase to the distribution rate for Class I shares.
  • The distribution rate for Class A shares will increase to 9.81% based on the NAV per Class A share as of the end of December, representing an approximate 17.39% increase.
  • The distribution rate for Class T shares will increase to 9.54% based on the NAV per Class T share as of Dec. 31, representing an approximate 17.93% increase.
  • The distribution rate for Class U shares will increase to 9.33% based on the NAV per Class U share as of the end of December, representing an approximate 18.50% increase.
  • The distribution rate for Class U-2 shares will increase to 9.24% based on the NAV per Class U-2 share as of Dec. 31, representing an approximate 18.51% increase.

FS Credit Income Fund seeks to dynamically invest in the best relative value opportunities across public and private credit to provide attractive total returns, including an attractive level of current income. The fund invests in assets that are often outside the scope of liquid strategies and market indexes and traditional direct lending strategies.

The fund returned 9.52% in 2024, outperforming high-yield bonds by 130 basis points and leveraged loans by 57 basis points.

“We believe the flexibility to invest across private and public credit in less trafficked areas of the public markets and in lower and core middle market private companies is key to delivering differentiated returns in today’s market,” said Andrew Beckman, head of FS Investments’ global credit team and portfolio manager for FS Credit Income Fund. “We entered 2025 with a strong liquidity position to grow our allocation to private credit and take advantage of attractive investment opportunities that may arise from periods of volatility.”

As previously reported by The DI Wire, the fund lowered its management fee from 1.6% of gross assets to 1% of gross assets, effective Dec. 1, 2024. The fund stated, as well, that from Dec. 1, 2024, through Dec. 31, 2025, the fund will waive the management fee. This change to fees as well as other announcements – e.g., FS Investments investing $25 million into the fund plus an additional $25 million through fund affiliates – came after the resignation of the fund’s sub-adviser, GoldenTree Asset Management Credit Advisor LLC.

FS Investments manages more than $82 billion in assets, approximately $29 billion of which sits on its credit platform.

According to the fund’s website, FS Credit Income Fund is an opportunistic, alternative credit solution that seeks to provide attractive total returns with an attractive level of income by dynamically investing across public and private credit. As of Jan. 24, the fund’s daily NAV was $12.40 for Class I shares.

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