Fs Kkr Capital Corp. · NYSE:FSK
Fs Kkr Capital — FS Investment — Merger or Acquisition (December 2017)
21 slides from Fs Kkr Capital's merger presentation, Dec 11, 2017
Slide 1: FS Investments & KKR Form Strategic Partnership
FS Investments & KKR Form Strategic Partnership Combining FSIC & CCT platforms to create stockholder value Exhibit 3
Slide 2: FS Investments and KKR to Establish industry-leading partnership
FS Investments and KKR to Establish industry-leading partnership FS Investments (“FS”) and KKR Credit Advisors (“KKR”) have announced an agreement to form a strategic partnership, creating a premier ~$18B1 alternative lending platform 1 Assumes stockholder approval for all funds 2 As of September 30
Slide 3: Transaction summary
Transaction summary1 KEY HIGHLIGHTS PARTNERSHIP CREATES LARGEST BDC PLATFORM3 Combined platform FSIC I, II, III & IV comprising $13.7B in gross assets CCT I & II comprising $4.6B in gross assets 150 sponsors, 325 borrowers Investment Advisors FS & KKR to seek stockholder approval for joint venture a
Slide 4: Strategic rationale
Strategic rationale Combines FS and KKR’s investment acumen, distribution networks and geographic footprints KKR brings fundamental, private credit investing expertise, while FS brings experience in direct lending and all aspects of ’40 Act fund management FSIC franchise becomes integral part of KKR
Slide 5: FS Investments: largest manager of BDC assets
Leading asset manager providing access to alternative sources of income and growth fs investments: largest manager of bdc assets $21B Assets under management 10 Registered investment vehicles 300+ Employees Partner with best-in-class institutional managers PARTNERSHIP EXPERTISE Manufacture and launc
Slide 6: KKR – A Leading asset management platform
KKR – A Leading asset management platform Note: AUM and headcount as of September 30, 2017. 1) KKR Capstone is not a subsidiary or affiliate of KKR. Please see Important Information for additional disclosure regarding KKR Capstone, which can be found on slide 12. Founded 1976 $153bn Assets Under Man
Slide 7: KKR Credit overview
$10bn"$24bn1 Private Credit Direct Lending Asset-based Finance Subordinated Debt $41bn " $55bn1 KKR Credit Assets Under Management $22bn Leveraged Credit Leveraged Loans High Yield Bonds Opportunistic Credit CLOs Revolving Credit $9bn Special Situations Deep Value Distressed Event-Driven KKR CREDIT
Slide 8: Global and diversified sourcing platform to improve credit selection
Global and diversified sourcing platform to improve credit selection 8 GLOBAL CORPORATE AND NON-SPONSOR COVERAGE GLOBAL ASSET-BASED FINANCE Combined sponsor coverage in excess of 150 sponsors Origination opportunities from combined 325 portfolio companies and KKR Credit’s 750+ company relationships
Slide 9: Partnership benefits
9 Partnership benefits Scaled platform generates new sources of income and return by offering a full suite of lending solutions FS + KKR PLATFORM TRADITIONAL BDC PLATFORM COVERAGE UNIVERSE U.S. sponsors International sponsors Direct corporate Financial intermediaries PRODUCT SUITE Direct lending Ass
Slide 10: The Path Forward: Committed to a seamless transition
THE PATH FORWARD COMMITTED TO A SEAMLESS TRANSITION for investors TRANSITION PERIOD STRATEGIC PARTNERSHIP CURRENT FS will serve as adviser GSO serves as sub-adviser up until April 2018 KKR (or its affiliates) will provide sourcing and administrative services to FS Enhanced joint platform FS & KKR wi
Slide 11: Partnership summary & Key highlights
PARTNERSHIP summary & Key highlights1 Complementary long-term partnership to build the premier alternative lending platform Creation of scale advantages to drive returns Expanded investment opportunities and product offering FSIC and CCT combined platform creates opportunity to deliver greater value
Slide 12: Disclosures
disclosures Forward-Looking Statements This presentation may contain certain “forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform A
Slide 13: FS Investment Corporation BDC Platform
FS investment CORPORATION BDC PLATFORM Creating the premier BDC investment platform to access broader sources of income and return Exhibit 4
Slide 14: Why the change?
Why THE CHANGE? Create long-term partnership FS + KKR partnership creates an $18B BDC platform with unrivaled scale Mutual commitment of resources Supported by existing $45+ million sponsor investment from FS employees and affiliates1 Expand investment opportunities Expect ability to co-invest along
Slide 15: A Long-term partnership building the premier BDC platform
A Long-term partnership Building THE PREMIER BDC PLATFORM KKR is the right partner to adapt to changing markets and grow stockholder value As of September 30, 2017. $153B ASSETS UNDER MANAGEMENT $15B INTERNAL BALANCE SHEET ~360 INVESTMENT PROFESSIONALS PRIVATE EQUITY & REAL ASSETS $88B AUM, ~260 inv
Slide 16: Complementary businesses drive new investment opportunities
Complementary businesses drive new INVESTMENT OPPORTUNITIES Generate new sources of income and return by offering a full suite of lending solutions Scaled platform generates new sources of income and return by offering a full suite of lending solutions TRADITIONAL BDC PLATFORM FS + KKR PLATFORM U.S.
Slide 17: Scale helps reduce expenses
Lower management fee to 1.5% for non-traded FSIC funds Seek to reduce administrative + professional services expenses Utilize scale to lower borrowing costs platform scale expected to drive cost savings ASSETS UNDER MANAGEMENT AS OF SEPTEMBER 30, 2017 ($B)1 Combination of FS and KKR will create a di
Slide 18: Partnership creates the premier BDC investment platform
partnership creates the premier bdc investment platform Unparalleled scale, resources and relationships to help grow stockholder value1 1 As of September 30, 2017. AUM based on fair value. 2 FSIC and KKR BDCs represented by total assets of FSIC, FSIC II, FSIC III, FSIC IV, CCT and CCT II. . 6 BDCS $
Slide 19: A potential path to liquidity for non-traded BDCs
a potential Path to liquidity for non-traded bdcs Proxy solicitation timeline for the FSIC franchise The timeline is subject to change based on the timing of regulatory and stockholder approvals. The timing of any liquidity event is uncertain, cannot be assured and is subject to, among other factors
Slide 20: Resources
Resources Website Webinars FSPROXY.COM COMMUNICATION SAMPLES PRESS RELEASES FREQUENTLY ASKED QUESTIONS EMAIL INVITATIONS TO COME WEBINARS
Slide 21: Disclosures
disclosures Forward-Looking Statements This presentation may contain certain “forward-looking” statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform A
FS Investment — Merger or Acquisition (December 2017) on 6ix