Prospect Flexible Income Fund Inc., a non-traded business development company formerly known as TP Flexible Income Fund Inc., has changed its name to Prospect Sustainable Income Fund Inc.
The name change was in connection with the company’s repositioning as an environmental, social and governance-focused fund, and it plans to implement an investment strategy to incorporate certain ESG criteria.
According to its responsible investment policy, the BDC will refrain “from seeking to invest in companies that needlessly despoil the environment, pursue unsustainable business models, or fail to adhere to proper governance.”
The fund utilizes exclusionary criteria to eliminate companies that derive significant revenue (typically 15 percent) from certain products and services that go against its investment thesis. These include tobacco, alcohol, gambling, nuclear power, fossil fuels, firearms and munitions, military contracting, and private prisons.
Prospect Sustainable Income Fund primarily invests in loans and other debt instruments issued by private companies. The fund will reportedly assess investments across fives areas of potential business risk, including business ethics, community, corporate governance, environment and climate impact, and employment and labor.
The company noted that each investment decision is further evaluated against a set of “sustainability themes” that are used to identify the “social and sustainability utility” of each investment.
Prospect Capital Management L.P. will continue to serve as the fund’s adviser.
As of September 30, 2021, the fair value of the fund’s investments totaled $37.9 million. The BDC was originally created by the merger of Pathway Capital Opportunity Fund and Triton Pacific Investment Corporation and changed its name from TP Flexible Income Fund in August 2020. In April 2021, shareholders approved a new investment advisory agreement with Prospect Capital Management L.P., replacing the previous agreement with Prospect Flexible Income Management LLC, an affiliate of Triton Pacific.