BDC giant FS Investments closes $1bn of Q3 middle market commitments

By Daniel Lanyon on Friday 2 December 2016

Alternative Lending

The US-based alternatives asset manager has increased its activity in the third quarter of this year with investments up 20 per cent by volume from the previous quarter.

Business Development Companies (BDCs) belonging to FS Investments have closed just $988m worth of loans to US mid-market firms in the third quarter of 2016, with four commitments of more than $100m, according to regulatory filings.

FS Investments, formerly Franklin Square Capital saw its BDC direct lending platform commit senior secured loans and other debt and equity financing to middle market companies, bringing its year-to-date total originations to more than $2.2bn.

The five Business Development Companies (BDCs) owned by FS Investments also saw a large uptick in capital commitments in the second quarter of 2016 in $830m.

New directly originated investments during the quarter were made in support of nine portfolio companies headquartered in seven U.S. states.

"Our ability to customize financing solutions to a company's specific needs delivers a unique value to those businesses and, ultimately, our investors," said Michael C. Forman, Chairman and Chief Executive Officer of FS Investments. "In several cases, we upsized our financing for existing portfolio companies, where the added capital helps those companies expand their operations."

The five BDCs managed by affiliates of FS Investments are NYSE: FSIC, FS Investment Corporation II (FSIC II), FS Investment Corporation III (FSIC III), FS Investment Corporation IV (FSIC IV) and FS Energy and Power Fund (FSEP). FS Investments is the largest manager of BDCs.

The five Business Development Companies (BDCs ) owned by Franklin Square Capital have seen a large uptick in capital commitments in the second quarter of 2016. FSIC, FSIC II, FSIC III and FSIC IV provided a new senior secured unitranche and equity commitment to Cadence Education, a Scottsdale, AZ-based provider of private pre-kindergarten and elementary childcare and education services.

The company is among the largest providers of private childcare and education services in the country. The new financing supported Morgan Stanley Capital Partners' acquisition of the company from Audax Partners.

FSIC, FSIC II and FSIC III upsized their senior secured unitranche commitment to Transplace Holdings, a Frisco, TX-based logistics and transportation management company. The incremental commitment financed a strategic acquisition. Transplace is a portfolio company of Greenbriar Equity Group.

FS Investments was founded in 2007 as Franklin Square Capital Partners. It is headquartered in Philadelphia with offices in Orlando and Washington, DC. The firm currently manages six funds with over $18 billion in assets under management.

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