Non-traded, energy-focused business development company (BDC) FS Energy & Power Fund (FSEP) recently announced that it will aim to raise an additional $900 million in shares through a follow-on offering.
FSEP, sponsored by Franklin Square Capital Partners the pioneer of the first non-traded BDC and largest manager in the space today, raised over $3 billion in equity from its first two registered offerings.
The BDC invests in debt and equity of energy companies involved in exploration, development, production, transportation, processing, storage, refining, and generation, among other activities, with a focus on upstream, midstream, power, service, and equipment sub-sectors of the energy industry.
Recent volatility in energy prices has reduced bank lending and investor investing in energy companies. This disruption in credit flow creates opportunities for lenders like FSEP.
The fourth quarter of 2014 proved this to be true as FSEP committed $635 million in directly originated investments in private U.S. energy and power companies.
All signs indicate there’s plenty of opportunity remaining for lenders.
“The follow-on offering will provide FSEP ample liquidity to take advantage of our robust pipeline of direct investment opportunities in strong companies,” commented Michael C. Forman, Chairman and Chief Executive Officer of FSEP.
“Today’s market conditions make this a particularly good time for us to negotiate better yields and terms that can enhance returns for our investors,” added Forman.
For more information on FS Energy & Power Fund, click here.
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