If you are considering investing in the Franklin Square Energy & Power Fund (FSEP), you should know a few things. FSEP is a non-traded business development company that invests primarily in debt and, to a lesser extent, equity securities of private energy and power companies in the United States.
FSEP has faced several challenges in recent years. Following the payment of the March 31, 2020 distribution, FSEP announced the suspension of regular monthly distributions, as well as the suspension of its quarterly share repurchase program. Furthermore, as of September 30, 2022, FSEP’s NAV per share is $3.85, which is significantly lower than the initial offering price of $10.00 per share.
Investors have also reported problems redeeming their shares directly with FSEP’s sponsor, Franklin Square Investments, and FSEP is regarded as a high-risk, illiquid investment.
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Furthermore, the share price of FSEP has fluctuated significantly, and some investors have lost money. The fund’s share price had dropped to $1.50 per share in 2017, and its share price has recently dropped again, prompting an investigation into the firm.
What Should Investors Consider?
Given these difficulties, investors should carefully consider whether investing in FSEPs is a good fit for their investment objectives and risk tolerance. If you decide to invest, ensure you understand the risks involved and thoroughly review all disclosures and investment documents before making any decisions.
In summary, FSEP has faced several challenges in recent years, including the suspension of its distributions and share repurchase program, redemption difficulties, and significant fluctuations in its share price. Before making any investment decisions, investors should consider whether this investment is appropriate for their needs and consult a financial advisor.
Investors should also be aware of the eligibility requirements for FSEP investments. An investor must have either a net worth of at least $70,000 and an annual gross income of at least $70,000 or a net worth of at least $250,000 to invest in an FSEP.
It is also important to note that FSEP is a long-term investment, and investors should have sufficient financial resources and no need for liquidity. Investors requiring liquidity or limited financial resources may want to consider alternative investments.
Finally, investors who have already invested in an FSEP and suffered losses may be able to file claims or lawsuits against the broker or financial advisor who recommended the investment, as well as against the fund itself. It is critical to seek the counsel of an experienced investment fraud attorney who can assess the merits of your case and recommend the best course of action.
Final Thoughts
Finally, while Franklin Square Energy & Power Fund may offer income and growth potential, investors should carefully consider the risks associated with this investment, such as its illiquidity, eligibility requirements, and fluctuating share price. Investors should review all disclosures and investment documents before making any investment decisions, consult with a financial advisor, and consider other investment options that may better align with their investment goals and risk tolerance.
FAQs
What is Franklin Square Energy & Power Fund (FSEP)?
FSEP is a non-traded business development company that primarily invests in the debt and, to a lesser extent, equity securities of private U.S. energy and power companies.
What are the risks associated with investing in FSEP?
FSEP is considered a high-risk, illiquid investment, and its share price has fluctuated significantly. Additionally, the fund has suspended its distributions and share repurchase program, and investors may experience difficulties redeeming their shares directly with FSEP’s sponsor.
What should investors do if they have already invested in FSEP and have experienced losses?
Investors who have experienced losses may be entitled to file claims or lawsuits against the broker or financial advisor who recommended the investment or against the fund itself. It is important to seek the advice of an experienced investment fraud lawyer who can help assess the merits of your case and determine the appropriate legal action. Haselkorn & Thibaut (InvestmentFraudLawyers.com) is currently working with investors.
What is FSEP’s NAV per share?
As of Sept 30, 2022, FSEP’s NAV per share is $3.85 per share, significantly lower than the original offering price of $10.00 per share.
What is the investor distribution policy for FSEP?
FSEP has suspended its regular monthly distributions and distribution reinvestment plan as of March 31, 2020.
