The board of FS Energy and Power Fund, a non-traded business development company sponsored by FS Investments, announced they have approved changing the fund’s name to FS Specialty Lending Fund.
In connection with altering the company name, FS is changing its non-fundamental investment policy. Specifically, the company’s revision will focus on investing primarily in a portfolio of secured and unsecured floating and fixed rate loans, bonds and other types of credit instruments. FS says that under normal circumstances, this will represent at least 80% of the fund’s total assets, rather than to invest at least 80% of its total assets in securities of energy and power related, or energy, companies.
According to FS, the transition to a diversified credit strategy is designed to “help enhance the return to shareholders, maximize the fund’s long-term liquidity options, accelerate the timeline to a liquidity event and reduce the volatility associated with a single sector-focused strategy.”
The effective date of the new name and investment policy is expected to be seen in the third quarter of 2023.
FS says that it also expects to target a liquidity event within three years of the effective date of the investment strategy change. This may include a merger, sale of the portfolio, listing of the common stock on a national securities exchange or other transaction.
FS Energy and Power Fund launched in July 2011 to invest primarily in privately-held U.S. companies in the energy and power industry. In November 2016, the company closed its public offering to new investors. The company’s investment portfolio had a fair value of approximately $2.2 billion as of December 31, 2020.
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