The Fund invests primarily in global corporate credit using, among other strategies, an event-driven, high conviction approach. FS Global Credit Opportunities Fund invests globally, with a focus on North America and Western Europe, and in a broad range of debt and equity securities of both public and private companies, including:
- Senior secured, second lien and unsecured loans
- Secured and unsecured bonds
- Preferred stock, common stock and structured products
In order to create value for investors, the Fund seeks to benefit primarily from specific corporate events such as mergers, corporate reorganizations or debt maturities that are expected to impact the value of a company’s securities. The Fund intends to take advantage of dislocations that arise in the markets due to an impending event for which the market’s apparent expectation of value differs substantially from the view of its managers.
Event-driven investing depends much more heavily on the managers’ ability to successfully predict the outcomes of these events than on underlying macroeconomic fundamentals, such as the level of interest rates or gross domestic product. As a result, successful event-driven strategies may offer substantial diversification benefits and the ability to generate performance in uncertain market environments. The Fund’s investment strategy revolves around a thorough due diligence process and is based on the belief that a deep understanding of companies and the industries in which they operate is critical to generating positive income and returns.
The investment managers select companies they believe offer the best opportunities for creating potential return. Below investment grade instruments (commonly referred to as “high-yield” securities or “junk bonds”) may have predominantly speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal. Investments in high yield securities should be considered speculative.