FS Investments and EIG to form joint venture

FS Investments and EIG Global Energy Partners have agreed to form a joint venture. The joint venture will focus on providing “flexible” financing solutions to energy and infrastructure companies. No financial terms were disclosed.

PRESS RELEASE

PHILADELPHIA and WASHINGTON, Dec. 11, 2017 /PRNewswire/ — FS Investments, a leading alternative investment manager with more than $20 billion in assets under management, today announced that it has entered into an agreement to create a joint venture with EIG Global Energy Partners (EIG), a global alternative investment firm focused on energy and energy-related infrastructure.

The FS Investments / EIG joint venture is expected to create a platform with the scale, flexibility and energy industry expertise to offer energy and infrastructure companies flexible financing solutions across the capital structure. As a result, following the formation of the venture, the FS Investments / EIG team expects to generate enhanced deal flow — particularly directly originated deals — that positions the portfolio to create long term value for FS Energy and Power Fund (FSEP) investors.

“As a leading provider of institutional capital in the global energy industry, EIG is a perfect partner to jointly manage FSEP given the firm’s sector expertise, global reach and scale,” said Michael Forman, Chairman and Chief Executive Officer of FS Investments. “We look forward to working together to transition the FSEP portfolio with an eye toward enhancing returns, reducing risk, and creating a liquidity event for our investors through a public listing.”

“We are excited to partner with FS Investments to manage FSEP,” said William Sonneborn, President of EIG. “We are honored that after an extensive search, FS Investments and the board of FSEP chose EIG as their partner. We believe that as an integrated team we can improve the existing portfolio and its returns to FSEP investors.”

Under the terms of the agreement, following shareholder approval, FS Investments and EIG will provide investment advisory services to FSEP. In addition, EIG has filed an application for a new exemptive relief order that will allow FSEP to co-invest with EIG’s other funds and accounts.

Timeframe for Transition
The board of trustees of FSEP has approved the new investment advisory agreement with the joint venture. FSEP currently intends to begin soliciting shareholder approval of the new investment advisory agreement in January 2018.

EIG will provide non-advisory services to FSEP until FSEP’s entry into the new investment advisory agreement with the joint venture. FS Investments and GSO Capital Partners (GSO) have entered into an agreement to conclude their relationship with respect to all of FS Investments’ sponsored funds that are sub-advised by GSO. FS, GSO and EIG will work together to ensure a smooth transition.

“Our partnership with GSO has created significant value for our investors and borrowers,” added Forman. “We thank GSO for its sub-advisory services and commitment to ensure a seamless transfer of advisory responsibilities.”

Additional Announcements from FS Investments
Separately, FS Investments also announced that it has entered into an agreement to create a partnership with KKR & Co. L.P. to provide investment advisory services to four business development companies (BDCs) managed by FS Investments and a BDC currently managed by KKR, and the firm has hired a seasoned liquid credit portfolio manager to manage FS Global Credit Opportunities Fund.

Additional information regarding these announcements can be accessed at www.fsproxy.com and www.fsinvestments.com.

This announcement does not impact FS Investments’ other funds: FS Credit Income Fund, FS Credit Real Estate Income Trust, Inc., FS Energy Total Return Fund and FS Multi-Strategy Alternatives Fund.

About FS Investments
FS Investments is a leading asset manager dedicated to helping individuals, financial professionals and institutions design better portfolios. The firm provides access to alternative sources of income and growth and focuses on setting industry standards for investor protection, education and transparency.

FS Investments is headquartered in Philadelphia, PA with offices in New York, NY, Orlando, FL and Washington, DC. Visit fsinvestments.com to learn more.

About EIG
EIG Global Energy Partners specializes in private investments in energy and energy-related infrastructure on a global basis and has $17.0 billion under management as of September 30, 2017. Since 1982, EIG has been one of the leading providers of institutional capital to the global energy industry, providing financing solutions across the balance sheet for companies and projects in the oil and gas, midstream, infrastructure, power and renewables sectors globally. EIG has invested over $24 billion in more than 320 portfolio investments in 36 countries. EIG is headquartered in Washington, D.C., with offices in Houston, London, Sydney, Rio de Janeiro, Hong Kong and Seoul. For more information, please visit www.eigpartners.com.