Philly EnterpriseTech Roundup 12/29 to 12/31: FS Investment's troubles; A look at some of the individual investors in Uber




Soon after Philly-based FS Investments (formerly Franklin Square Investments) completed the merger of its largest fund, FS Investment Corp., with Corporate Capital Trust, the Financial Times reported new fund co-manager KKR had written down the fund's book value by more than 25% since taking over.

The $2 billion debt fund, formerly co-managed by Blackstone, was turned over to KKR in April.

The fund, renamed FS-KKR Capital Corp when the management contract was moved from Blackstone to KKR, wrote down five of its major investments. Thermasys, a Buffalo-based manufacturer of industrial heat exchangers that missed an interest payment in the autumn and has been unable to refinance debts having payments due next year, was one of the largest. KKR now values the company’s subordinated debt at $72.4 million, down from $112 million.

The FT reports that the problems were more than anticipated by KKR. It suggests that KKR is not as much of a workout-oriented firm as Blackstone, and because of risk uncertainty its valuations tend to be more conservative.

While the write down is not good news for the FSI or shareholders, by itself it doesn't seem to be an event of enough magnitude to flame existing fears of broader problems in the corporate debt market.

FS Investments now has about $24 billion in assets under management.

The FT article was not a complete surprise. In late November, FSI had acknowledged some of its problems to its investors and independent sales people .






Most of of us know the story of how First Round Capital led Uber's small seed round and probably (at least partially) exited last year with a multi-billion dollar payoff. But besides other venture capital firms, there was also a small army of individual investors who joined in that round. One was Jeff Bezos, like he really needs it.


But another is West Philly-born talent manager and producer Troy Carter, who managed musicians like John Legend and Lady Gaga. He went on to be an executive at Spotify, and is now managing his own incubator, the Atom Factory, in LA.





































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