Company’s net assets to the same ratio as reported by other comparable BDCs. The Company does not reimburse FS/EIG Advisor for any services for which it receives a separate fee, or for rent, depreciation, utilities, capital equipment or other administrative items allocated to a controlling person of FS/EIG Advisor.
The following table describes the fees and expenses accrued under the FS/EIG Investment Advisory and Administrative Services Agreement during the six months ended June 30, 2023 and 2022 and the years ended December 31, 2022 and 2021 (dollar amounts in the table below and the related notes are presented in thousands):
|
Related Party
|
|
|
Source Agreement
|
|
|
Description
|
|
|
Six Months
Ended
June 30,
2023
|
|
|
Six Months
Ended
June 30,
2022
|
|
|
Year Ended
December 31,
2022
|
|
|
Year Ended
December 31,
2021
|
|
|
FS/EIG Advisor
|
|
|
FS/EIG Investment Advisory
and Administrative Services
Agreement
|
|
|
Base Management Fee(1)
|
|
|
|
$ |
18,905 |
|
|
|
|
$ |
19,613 |
|
|
|
|
$ |
41,940 |
|
|
|
|
$ |
40,122 |
|
|
|
FS/EIG Advisor
|
|
|
FS/EIG Investment Advisory and
Administrative Services Agreement
|
|
|
Administrative Services Expenses(2)
|
|
|
|
$ |
2,679 |
|
|
|
|
$ |
2,910 |
|
|
|
|
$ |
5,626 |
|
|
|
|
$ |
5,713 |
|
|
(1)
During the six months ended June 30, 2023 and 2022, $21,404 and $20,503, respectively, in base management fees were paid to FS/EIG Advisor. The base management fee amount shown in the table above is shown net of $274 and $2,398 in structuring, upfront or certain other fees received by FS/EIG Advisor or its members and offset against base management fees for the six months ended June 30, 2023 and 2022, respectively. As of June 30, 2023, $8,686 in base management fees were payable to FS/EIG Advisor. During the years ended December 31, 2022 and 2021, $41,221 and $39,812 in base management fees were paid to the Advisor. The base management fee amounts shown in the table above for the years ended December 31, 2022 and 2021 are shown net of $2,619 and $1,439, respectively, in structuring, upfront or certain other fees received by the Advisor and offset against base management fees.
(2)
During the six months ended June 30, 2023 and 2022, $1,649 and $1,372, respectively, of the accrued administrative services expenses related to the allocation of costs of administrative personnel for services rendered to the Company by FS/EIG Advisor and the remainder related to other reimbursable expenses. The Company paid $2,933 and $2,234 in administrative services expenses to FS/EIG Advisor, or its affiliates, during the six months ended June 30, 2023 and 2022, respectively. During the years ended December 31, 2022 and 2021, $3,930 and $3,450, respectively, of the accrued administrative services expenses related to the allocation of costs of administrative personnel for services rendered to the Company by FS/EIG Advisor and the remainder related to other reimbursable expenses. The Company paid $5,134 and $4,849, respectively, in administrative services expenses to FS/EIG Advisor, or its affiliates, during the years ended December 31, 2022 and 2021.
Exemptive Relief
As a BDC, the Company is subject to certain regulatory restrictions in making its investments. For example, BDCs generally are not permitted to co-invest with certain affiliated entities in transactions originated by the BDC or its affiliates in the absence of an exemptive order from the SEC. However, BDCs are permitted to, and may, simultaneously co-invest in transactions where price is the only negotiated term. In an order dated June 4, 2013 (the “Order”), the SEC granted exemptive relief permitting the Company, subject to the satisfaction of certain conditions, to co-invest in certain privately negotiated investment transactions with certain affiliates of its former investment advisor and FS KKR Capital Corp., or collectively the Company’s co-investment affiliates. Effective April 9, 2018 (the “JV Effective Date”), and in connection with the transition of advisory services to a joint advisory relationship with EIG, the Company’s board of trustees has authorized and directed that the Company (i) withdraw from the Order, except with respect to any transaction in which the Company participated in reliance on the Order prior to the JV Effective Date, and (ii) rely on an exemptive relief order dated April 10, 2018, granted to EIG and its affiliates, which permits the Company to participate in co-investment transactions with certain other EIG advised funds (the “EIG Order”). On September 19, 2023, the Company, FS/EIG Advisor and certain of their affiliates (the “FS Funds”) filed an application for exemptive relief with the SEC to permit the FS Funds, including future affiliated investment funds, to co‑invest in the same investment opportunities.