For the second time in a month, an illiquid, nontraded alternative investment fund failed to meet the threshold of shareholder votes needed to begin trading its shares on the NYSE. The FS Specialty Lending Fund on Friday failing to get shareholder approval to reorganize the fund so that it could eventually list before the end of the year.
The fund, with $1.9 billion in assets, adjourned its meeting of shareholders on September 26 without getting enough votes. Shareholders will meet again on October 14, with the intention of getting more support from shareholders for the initiative.
The FS Specialty Lending Fund’s net asset value – NAV – is $19.82 per share as of July, according to the fund.
It’s the second alternative investment fund that is looking to list on the NYSE that has come up short, at least initially, in winning clients’ approval for a listing, which means that shareholders could sell their positions in the company or even add to them.
After falling short a few weeks ago of getting shareholder support to start trading, the $3.7 billion Bluerock Total Income + Real Estate Fund last week crossed the goal line and won investors’ approval to list its shares later this year.
The fund did not initially win shareholders’ approval during a first round of voting that was tallied on September 4. After that, the alternative asset manager’s CEO and founder, Ramin Kamfar, campaigned for clients to vote for the proposal.
FS Specialty Lending Fund in April said its board approved a plan to prepare for the listing of its common shares on the New York Stock Exchange. The board also approved a 6 to 1 reverse share split at the time.
In advance of the listing, the intention is to convert the fund from a business development company to a closed-end fund, but that proposed reorganization last week did not initially win shareholder approval. The fund has two weeks to win shareholder support to cross that threshold.
The closed-end fund expects to begin trading on the NYSE under the ticker symbol FSSL before the end of the fourth quarter of 2025.
The fund launched in 2011 and was initially the FS Energy & Power Fund. FS Investments, based in Philadelphia and the brainchild of Michael Forman, this summer rebranded the firm as Future Standard, with $86 billion in investments.
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