FS Energy and Power Fund, a business development company managed by an affiliate of FS Investments, is participating in a directly originated $500 million perpetual preferred units offering to support USA Compression Partners’ purchase of compression assets from Energy Transfer Partners LP.
USA Compression is one of the nation’s largest independent providers of compression services, a component of midstream infrastructure and natural gas transport.
Oil and gas operations are generally divided into three stages – upstream, midstream and downstream. The midstream stage involves the processing, storing, transporting and marketing of crude or refined petroleum products.
FS Energy and Power Fund has committed to provide approximately $75 million of the perpetual preferred units financing. The transaction was originated by EIG Global Energy Partners Capital Markets LLC, a broker-dealer affiliate of EIG Global Energy Partners.
“This transaction is a great example of our commitment to sourcing more directly originated, midstream-focused investment opportunities for the FSEP portfolio,” said Mike Kelly, president and chief investment officer of FS Investments. “With the help of our new partner, EIG, to source and originate direct investments, we will continue to transition the FSEP portfolio for investors.”
FS Energy and Power Fund focuses primarily on investing in the debt and income-oriented equity securities of privately held U.S. companies in the energy and power industry. The company closed its continuous public offering in November 2016 after raising approximately $4.3 billion in investor equity and continues to raise funds through its distribution reinvestment plan. According to Summit Investment Research, the fund oversees a $4.2 billion investment portfolio, as of the third quarter 2017.