{"id":1228,"date":"2013-04-09T14:02:36","date_gmt":"2013-04-09T14:02:36","guid":{"rendered":"https:\/\/www.stockbrokerfraudblog.com\/2013\/04\/as_brokers_peddle_junkloan_fun"},"modified":"2022-03-10T16:33:39","modified_gmt":"2022-03-10T22:33:39","slug":"as-brokers-peddle-junkloan-fun","status":"publish","type":"post","link":"https:\/\/www.investorlawyers.com\/blog\/as-brokers-peddle-junkloan-fun\/","title":{"rendered":"As Brokers Peddle Junk-Loan Funds, Franklin Square Raises Billions of Dollars"},"content":{"rendered":"

\t\t\t\tAccording to MTS Research Advisors, non-traded business-development companies, which are junk-rated debt funds<\/a>, doubled their sales to a $2.8 billion high in 2012, making $134 million in revenue. Among these was Franklin Square’s FS Investment Corp., an initial $2.5 billion fund to which investors have already paid $323.5 million in commissions and fees-25% more than the $258 million that they have received, reports Wells Fargo & Co. analyst Jonathan Bock and Bloomberg. $5,000 is the minimum investment.<\/p>\n

While Franklin Square <\/a>touts its fund as having a structure that lets investors who don’t have sufficient money buy into hedge or private-equity funds to diversify into loans to smaller companies, Bloomberg notes that Morningstar Inc. analyst Sarah Bush recently observed that about 50% of the securities held by the fund overlaps with holdings found in bank-loan mutual funds, which means that Franklin Square isn’t giving investors access to anything they wouldn’t be able to obtain via other avenues. <\/p>\n

Non-traded business-development companies lend investors’ money to companies. They can charge high interest rates on the loans because lenders are usually rated junk or aren’t rated at all. The debt usually pays a floating rate, which means investors will make more if benchmark interest rates go up.<\/p>\n

Continue Reading \u203a<\/a><\/div>\n","protected":false},"excerpt":{"rendered":"

According to MTS Research Advisors, non-traded business-development companies, which are junk-rated debt funds, doubled their sales to a $2.8 billion high in 2012, making $134 million in revenue. Among these was Franklin Square’s FS Investment Corp., an initial $2.5 billion fund to which investors have already paid $323.5 million in commissions and fees-25% more than […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[4037],"tags":[],"class_list":["post-1228","post","type-post","status-publish","format-standard","hentry","category-junk-rated-debt-funds"],"yoast_head":"\nAs Brokers Peddle Junk-Loan Funds, Franklin Square Raises Billions of Dollars — Investor Lawyers Blog — April 9, 2013<\/title>\n<meta name=\"description\" content=\"According to MTS Research Advisors, non-traded business-development companies, which are junk-rated debt funds, doubled their sales to a $2.8 billion high — April 9, 2013\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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