FSEN Converts To FSSL, The Next Alpha Opportunity
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Alpha Gen CapitalInvesting Group LeaderFollow5ShareSavePlay(13min)CommentsSummaryFS Specialty Lending Fund offers a compelling opportunity as a newly listed, diversified credit CEF trading at a -26.9% discount to NAV.FSSL has transitioned from an energy-focused, underperforming BDC to a portfolio of 84% floating-rate, 90% senior secured loans, with minimal interest rate risk and a 0.5-year duration.Management has cut fees, reduced non-accruals to 0.8%, and targets a competitive 9.0%-9.5% NAV yield, translating to a 12.3% yield at current prices.I recommend a starter-to-moderate position, especially for investors seeking high income and willing to swap out existing high-yield holdings.Douglas Rissing/iStock via Getty Images (This idea was brought to members of Yield Hunting on Nov 23rd). History of the Fund The Future Standard Specialty Lending Fund (FSSL) was formerly known as the FS Energy and Power Fund (FSEP). It isThis article was written byAlpha Gen Capital17.33K FollowersFollowAlpha Gen Capital is a former financial advisor and his analysis is meant to provide a relatively safer income stream with CEFs and mutual funds. He has been writing about investing on Seeking Alpha for the past decade and he aims to help investors better understand how to properly construct a portfolio.
Alpha Gen Capital leads the Investing Group Yield Hunting: Alt Inc Opps, where along with his team of analysts, he focuses on closed-end funds and getting yield from bonds to complement dividend portfolios. The service is dedicated to income investors who are searching for yield without the high risk of the equity market. Additionally, they provide 4 actively managed portfolios.Analyst’s Disclosure:I/we have a beneficial long position in the shares of FSSL either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You