FS Investments and Portfolio Advisors announced a deal to combine their firms, joining forces to provide a diversified suite of alternative investment solutions for institutional and individual investors with a significant permanent capital base and a potent distribution platform.
Philadelphia-based FS Investments is focused on democratizing of alternative investments and has more than $35 billion in assets under management. Portfolio Advisors, headquartered in Darien, Conn., is a global middle market private asset management with more than $38 billion in assets. Together the companies aim to bring a diversified “suite” of alternative investment solutions for both institutional investors and individuals.
Portfolio Advisors was founded in 1994 and offers private equity, private credit and private real estate investments across a range of strategies including direct, secondary and primary investments and junior and senior credit. Most recently, Portfolio Advisors launched its MVP Private Markets Fund, a registered private equity fund with more than $500 million in assets, which is structured for both wealth management and institutional clients.
Founded in 2007, FS Investments allocates to private credit, real estate credit, opportunistic credit, structured credit, liquid credit and liquid alternatives across a variety of fund structures including business development companies, non-traded REITs and interval, closed-end and mutual funds. The team is focused on distributing its products via an extensive wealth management distribution platform, with hundreds of selling agreements across the wirehouse, RIA and independent broker-dealer channels. In recent years, the firm also launched in-house managed, institutionally focused credit strategies, using CLO and draw-down structures, officials said.
FS Investments aims to expand Portfolio Advisors’ access to wealth management channels, unlocking near-term opportunities for Portfolio Advisor’s MVP Private Markets Fund and feeder funds for other Portfolio Advisors strategies. FS Investments’ and Portfolio Advisors’ executives will have representation on senior leadership committees across both organizations.
“I am thrilled to join forces with Portfolio Advisors and applaud our team, led by our Co-Presidents, Enrico Gaglioti and Mike Kelly, for identifying an ideal strategic partner,” said Michael Forman, chairman and CEO of FS. “This transaction is transformative for FS Investments, accelerating our efforts to broaden our institutional client base, diversify our offerings to include growth-oriented products such as private equity, and deepen our in-house investment capabilities. This combination also enhances our financial profile, diversifies our revenue streams and positions us to invest in further growth.”
Portfolio Advisors’ extensive institutional client network and international distribution capabilities across North America, Europe and Asia will combine with FS’ existing wealth management distribution network.
“This partnership provides significant new resources that will help support our global institutional clients,” said Brian Murphy, co-founder of Portfolio Advisors. “At the same time, FS Investments’ deep product development expertise and robust distribution platform will bring our leading private markets investment strategies to a broader audience. This combination presents a unique opportunity to expand our reach, launch new strategies and drive growth while providing continuity for our first-rate investment teams and institutional clients.”
Portfolio Advisors will become the institutional investment arm of FS Investments and will continue to operate with its full complement of employees and its offices in Darien, Dallas, London, Zurich, Hong Kong and Singapore. The transaction is expected to close in the first half of 2023, subject to applicable regulatory approvals and other customary closing conditions.
