FS Investment Corporation II (FSIC II) is a business development company (BDC) designed to provide a high level of current income. The fund primarily invests in floating rate, senior secured loans of middle market private U.S. companies.

Investment objective

FSIC II is a publicly registered, non-traded BDC and closed to new investors in March 2014 after raising over $3 billion in equity capital. A BDC allows individual investors, at low investment minimums, to invest in the same type of private companies as do large institutions, endowments and wealthy individuals. FSIC II seeks to generate current income and, to a lesser extent, long-term capital appreciation. 

Investment strategy

FSIC II invests primarily in floating rate, senior secured loans of private U.S. companies and has a flexible investment platform, which diversifies its holdings across multiple industries and geographic locations. FSIC II seeks to invest in a broadly diversified portfolio of companies with:

  • Leading, defensible market positions
  • Positive cash flows
  • Proven management teams
  • Private equity sponsorship
  • Viable exit strategies

While diversification and asset allocation alone cannot guarantee a profit or eliminate the possibility of a loss of principal, this flexibility may help FSIC II provide investors with income and, to a lesser extent, growth while maintaining a focus on capital preservation.

 

 

    * FSIC II closed to new investors in March 2014. The public offering price is subject to a sales load of up to 10.0% of the public offering price per share (consisting of selling commissions of up to 7.0% and dealer manager fees of up to 3.0% of the public offering price per share) and offering expenses of up to 1.5% of the gross proceeds raised in the public offering, after payment of selling commissions and dealer manager fees.
    ** The annualized distribution rate is expressed as a percentage equal to the projected annualized distribution amount per share (which is calculated by annualizing the regular monthly cash distribution per share as of the date indicated above without compounding), divided by the final public offering price per share. FSIC II’s previous distributions to stockholders were funded in significant part by the reimbursement of certain expenses, including through the waiver of certain investment advisory fees, that are subject to repayment to its affiliate, Franklin Square Holdings, and its future distributions may be funded from such waivers and reimbursements. Significant portions of these distributions were not based on FSIC II’s investment performance and such waivers and reimbursements by Franklin Square Holdings may not continue in the future.

Corporate Governance

© 2015 FS Investment Corporation II