FS Investments

CEO Michael Forman and Vice Chairman David Adelman set strategic direction, but FS historically relied on KKR for credit portfolio management through sub-advisory arrangements. As FS has built internal investment capabilities, day-to-day credit decisions are led by its chief investment officers and portfolio managers, several of whom joined from KKR and major credit platforms. The firm's registered investment vehicles maintain independent boards that approve investment policies and advisor relationships.

KKR acquired a minority stake in FS Investments in 2018 and serves as the primary sub-adviser on FS's flagship credit products. The relationship dates to 2011 when FS began distributing KKR-advised funds to retail investors. FS manufactures the registered fund structures and manages distribution through broker-dealer networks, while KKR sources and manages the underlying credit assets. No single entity consolidates the full FS-KKR economics on their balance sheet; it remains a partnership with overlapping governance.

FS Investments primarily raises capital from individual and high-net-worth investors through wirehouse and independent broker-dealer channels. Its funds are registered under the Investment Company Act of 1940, making them accessible to accredited and non-accredited retail investors. While the firm does not run a traditional institutional fundraising program targeting pension funds or endowments, its scale—over $80 billion—means the products function as institutional-sized allocations to private credit, real estate, and infrastructure, competing for the same underlying assets as institutional managers.

FS pioneered retail-eligible alternative fund structures that offer periodic liquidity—monthly or quarterly tender offers—while holding illiquid underlying assets. Its interval funds allow investors to redeem a fixed percentage of shares each quarter, with gates that protect the portfolio from forced sales during market stress. The firm's non-traded BDCs historically offered limited liquidity through share repurchase programs. FS's structural design reflects a belief that individual investors will accept liquidity trade-offs for access to private-market returns.

The firm's credit and real estate origination teams focus on North American middle-market companies and properties. FS has regional offices in Philadelphia, New York, Orlando, and Sydney. The Sydney office supports distribution to Australian retail investors rather than deal sourcing. Infrastructure and secondaries strategies invest globally, though FS relies heavily on KKR and external managers for non-US origination and underwriting. The firm has not built a dedicated direct origination team in Europe or Asia.