PHILADELPHIA, Dec. 15, 2020 /PRNewswire/ -- FS Investments, a leading alternative investment manager, announced that FS Credit Income Fund (I share: FCRIX), an alternative credit strategy sub-advised by GoldenTree Asset Management, has reached its three-year anniversary.
Since inception, FS Credit Income Fund ("the Fund") has paid a high level of current income, with the Fund's annualized distribution rate averaging 6.10%1 as of October 31, 2020. Over the same period, the Fund returned 5.07% per year2, outperforming the liquid end of the loan and high yield bond markets by 208 basis points and 120 basis points per year, respectively.3
This performance has been driven by the Fund's flexible, alternative credit mandate that invests across asset classes, sectors and capital structures to capture the best relative value opportunities in liquid and less liquid areas of the credit markets. The Fund focuses on catalyst-driven investments offering a high level of current income and the potential for capital appreciation. These may include stressed and distressed assets, structured credit, emerging market debt and complex situations where GoldenTree's deep credit expertise can help unlock value.
GoldenTree was recently named 2020 Credit-Focused Hedge Fund Manager of the Year by Institutional Investors4 and 2020 CLO Manager of the Year by Alt Credit.5
"Credit markets are larger, more complex and move faster today than at any other period in recent memory," said Mike Kelly, Co-President and Chief Investment Officer at FS Investments. "As market speed increases, liquidity can be here today and gone tomorrow. We believe the flexibility of our strategy, the limited liquidity of the interval fund structure and our partnership with GoldenTree provides a truly differentiated way for investors to access the opportunities in credit across a full market cycle."
"While the financial advisors we serve are diversified across wirehouses, RIAs and the independent community, their clients have shared needs – solutions that deliver differentiated sources of income and growth to help reach their financial goals," commented Steve DeAngelis, Senior Managing Director of FS Investments and President of FS Investment Solutions. "We believe FS Credit Income Fund can help enhance client portfolios while also delivering a high level of current income, which is challenging to find in today's low rate environment."
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 Leawood, KS. Visit www.fsinvestments.com to learn more.
GoldenTree is an employee-owned, global asset management firm that specializes in opportunities across the credit universe in sectors such as high yield bonds, leveraged loans, distressed debt, structured products, emerging markets, private equity and credit-themed equities. GoldenTree was founded in 2000 and is one of the largest independent asset managers focused on credit. GoldenTree manages approximately $28 billion for institutional investors including leading public and corporate pensions, endowments, foundations, insurance companies and sovereign wealth funds. For more information, please visit www.goldentree.com.
1 The annualized distribution rate shown is expressed as a percentage equal to the projected annualized distribution amount per share (which is calculated by annualizing the most recent quarterly cash distribution per share declared as of the date indicated, without compounding), divided by the fund's net asset value per share of Class I shares as of the date indicated. The annualized distribution rate shown may be rounded. The payment of future distributions on FS Credit Income Fund's common shares is subject to the discretion of FS Credit Income Fund's board of trustees and applicable legal restrictions and, therefore, there can be no assurance as to the amount or timing of any such future distributions. The determination of the tax attributes of FS Credit Income Fund's distributions is made annually at the end of FS Credit Income Fund's fiscal year, and a determination made on an interim basis may not be representative of the actual tax attributes of FS Credit Income Fund's distributions for a full year. The actual tax characteristics of distributions to shareholders are reported to shareholders annually on Form 1099-DIV. The Fund may pay distributions in significant part from sources that may not be available in the future and that are unrelated to the Fund's performance, such as return of capital or borrowings. For the 12 months ended September 30, 2020, 100% of FS Credit Income Fund's distributions were funded through ordinary income.
2 Performance data quoted represents past performance and is no guarantee of future results. Class I shares have no sales charges; therefore performance is at NAV. Returns less than one year are cumulative; all others are annualized. YTD information is provided on a calendar-year basis. Total return figures reflect changes in share price and reinvestment of dividend and capital gain distributions. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost, and current performance may be lower or higher than the performance quoted. For performance data current to the most recent month-end, please call 877-628-8575 or visit our website at www.fsinvestments.com. Not all investors can invest in the Fund's Class I share class; different share classes would have different returns.
3 Basis points refers to a common unit of measure for interest rates and other percentages in finance. One basis point is equal to 1/100 of 1%, or 0.01%, or 0.0001, and is used to denote the percentage change in a financial instrument.
4 As named annually by Institutional Investor magazine. From a group of 6 nominated firms voted on by editorial staff and a survey of U.S. allocators. This award was not given in conjunction with FS Credit Income Fund.
5 As named annually by Alt Credit US Performance Awards. The award was not given in conjunction with FS Credit Income Fund.
FORWARD-LOOKING STATEMENTS AND IMPORTANT DISCLOSURES
This press release may contain certain forward-looking statements, including statements with regard to the future performance or operations of FS Credit Income Fund (the "Fund"). Words such as "believes," "expects," "projects," and "future" or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements, and some of these factors are enumerated in the filings the Fund makes with the U.S. Securities and Exchange Commission. The Fund undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
The Fund's investment objective is to provide attractive total returns, which will include current income and capital appreciation. There can be no assurance that the Fund will be able to achieve its investment objective.
An investment in the Fund involves a high degree of risk and may be considered speculative. Investors are advised to consider the investment objectives, risk and charges and expenses of the Fund carefully before investing. The Fund's prospectus contains this and other information about the Fund. Investors may obtain a copy of the Fund's prospectus free of charge at www.fsinvestments.com or by contacting FS Investments at 201 Rouse Blvd., Philadelphia, PA 19112 or by phone at 877-628-8575. Investors should read and carefully consider all information found in the Fund's prospectus and other reports filed with the U.S. Securities and Exchange Commission before investing.
Securities offered through ALPS Distributors, Inc. (1290 Broadway, Suite 1000, Denver, CO 80203, member FINRA), the distributor of the Fund. FS Investment Solutions, LLC is an affiliated broker-dealer that serves as the exclusive wholesale marketing agent for the Fund. FS Investment Solutions, LLC and ALPS Distributors, Inc. are not affiliated.
Investing in the Fund involves risk, including the risk that a shareholder may receive little or no return on their investment or that a shareholder may lose part or all of their investment. The Fund expects most of its investments to be in securities that are rated below investment grade or would be rated below investment grade if they were rated. Below investment grade instruments are particularly susceptible to economic downturns compared to higher rated investments. The Fund is subject to interest rate risk and will decline in value as interest rates rise. The Fund may use leverage to achieve its investment objective, which involves risks, including the likelihood of NAV volatility and the risk that fluctuations in interest rates on borrowings will reduce the return to investors. In addition to the normal risks associated with investing, investing in international and emerging markets involves risk of capital loss from unfavorable fluctuations in currency values, differences in generally accepted accounting principles or from social, economic or political instability in other nations. The Fund may invest in derivatives, which, depending on market conditions and the type of derivative, are more volatile than other investments and will magnify the Fund's gains or losses. An investment in shares should be considered only by investors who can assess and bear the illiquidity and other risks associated with such an investment.
No secondary market is expected to develop for the Fund's common shares; liquidity for the common shares will be provided only through quarterly repurchase offers for no less than 5% and no more than 25% of the common shares at net asset value, and there is no guarantee that an investor will be able to sell all the common shares that the investor desires to sell in the repurchase offer. Due to these restrictions, an investor should consider an investment in the Fund to be of limited liquidity.
SOURCE FS Investments