brokerwatch

 

Franklin Square Lawsuit | FS Investments | FS KKR Capital Losses

FS/KKR is an FS Investments (formerly Franklin Square Investments) and KKR Credit Advisors joint operation. Together, they completed the merger of FS Investment Corporation and Corporate Capital Trust in 2018 and, as DI Wire reported, it became then the “second largest publicly traded business development company.”

 

Business Development Companies (BDCs) “invest in small and medium-sized companies that are developing and/or financially distressed. Many are private companies that don’t make public disclosures” (Investor.org). Because if this, BDCs are only suitable for savvy investors who are wealthy.

 

If you have FS Investments or FS/KKR Capital in your portfolio, you may be entitled to recover your investment losses. Contact Peiffer Wolf today by filling out a Contact Form on our website or by calling 585-310-5140 to schedule a FREE Case Evaluation.

In 2020, FS Investments’s FS Energy & Power Fund suspended its repurchase program and cash distributions. Other FS Investments Products that raised concerns among investors were:

 

  • Corporate Capital Trust II (CCT II)*
  • FS Credit Income Fund–I (FCRIX)
  • FS Credit Real Estate Income Trust–I
  • FS Energy & Power Fund (FSEP)
  • FS Energy Total Return Fund–I (XFEYX)
  • FS Global Credit Opportunities Fund–A (FSGCO–A)
  • FS Investment Corporation II (FSIC II)*
  • FS Investment Corporation III (FSIC III)*
  • FS Investment Corporation IV (FSIC IV)*
  • FS Multi-Alternative Income Fund–I (FNNIX)
  • FS Multi-Strategy Alternatives Fund (FSMSX)

* consolidated in 2019 as FS KKR Capital Corp. II

 

FS Credit Real Estate Income Trust is specially concerning because it is a REIT. Brokers and financial advisors are often drawn to recommending REITs because of the high commissions associated with the transaction. These alternative investments are generally only suitable for savvy investors who are wealthy and sophisticated. These complex investment products are often highly illiquid, meaning investors may be stuck and not able to access their money. Moreover, many illiquid REITs cannot be freely sold in the marketplace.  All too often, investors trying to exit or access their money are faced with two bad options: sell the shares directly back to the sponsor at a heavily discounted price or sell the shares for pennies on the dollar through the limited secondary markets.

 

Thus, the securities law firm of Peiffer Wolf has begun another investigation into any and all brokers and advisors who recommended FS Investments or FS KKR to investors. If you invested in FS Investments or FS/KKR, Contact Peiffer Wolf for a FREE CONSULTATION by calling 585-310-5140 of by filling out a Contact Form on this website.

Have you suffered losses investing in FS Investments or FS KKR Capital? The broker misconduct attorneys at Peiffer Wolf will fight to recover your losses.

 

FS KKR Capital Corp II is a non-traded BDC whose value dropped after it became public in 2020. Unlike FS Capital Real Income Trust, a non-traded REIT, FS KKR Capital Corp II is a BDC and, as such, presents a different set of risks. They include, according to the U. S. Securities and Exchange Commission:

 

  1. There are risks in owning shares or loaning money to the small- and medium-sized companies that are different from, and in some ways more significant than, investments in larger public companies. These smaller companies may be more likely to go out of business or default on their debts.
  2. BDCs’ use of leverage can increase your return but can also increase your losses. It can also increase risk and can make the price of BDC shares more volatile.
  3. A distribution that includes a return of capital reduces the BDC’s asset base (the money the BDC has available to invest) and may make it harder for the BDC to make money in the future.
  4.  BDCs often have higher fees than other investment funds. […] These fees reduce the value of your investment.

 

If you have FS Investments or FS KKR Capital in your portfolio, you may be entitled to recover your investment losses. Contact Peiffer Wolf today by filling out a Contact Form on our website or by calling 585-310-5140 to schedule a FREE Case Evaluation.

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    IIf you believe you lost money because of unsuitable recommendations, including the addition of FS Investments and/or FS KKR to your portfolio, it is important to take action. Peiffer Wolf has represented thousands of victims, and we remain committed to fighting on behalf of investors.

     

    Contact Peiffer Wolf today by filling out a Contact Form on our website or by calling 585-310-5140 to schedule a FREE Case Evaluation.

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