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Bailey McCann, Opalesque New York:

$19 billion Philadelphia-based FS Investments has launched a new interval fund which will invest in energy. The FS Energy Total Return Fund is the firm's first closed-end interval fund and will invest opportunistically in energy companies and assets.

FS will be targeting $2 billion for its new energy fund initially, but total capacity could extend beyond that. FS Investments already manages more than $5 billion of energy and power assets, with a focus on directly originated private debt investments.

"We think energy is a unique industry in that it can provide both income generating investment opportunities as well as opportunities for growth," FS Investments Marc Yaklofsky tells Opalesque in an interview. "The interval fund structure will allow us to keep a broad mandate that invests in debt, equity, publicly held energy companies and privately held energy companies."

According to Yaklofsky, changing sources of energy supply, aging energy infrastructure, merger, and acquisition activity in the sector, and commodity price volatility have created an attractive environment for investing in energy and energy infrastructure companies. "We think there are opportunities for mispricing as a result of the volatility we've seen in energy recently," he adds.

FS is working with Magnetar Asset Management as a sub-advisor on the fund. Magnetar brings a significant energy investing track record and will source investment opportu......................

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