As of September 30, 2024, FS Specialty Lending Fund reported total assets of $1,986,320,000, a decrease from $2,059,557,000 at the end of 2023. Total investments at fair value increased to $1,692,052,000 from $1,523,196,000, with non-controlled/unaffiliated investments rising to $1,613,523,000, up from $1,414,684,000. Cash and cash equivalents saw a significant decline to $235,083,000 from $486,059,000. Total shareholders' equity slightly decreased to $1,554,989,000 from $1,562,055,000, and the net asset value per common share was $3.41, down from $3.43.

Investment income for the three months ended September 30, 2024, was $52,738,000, a 73.3% increase from $30,443,000 in the same period of 2023. For the nine months, total investment income rose to $172,274,000 from $115,014,000, marking a 49.8% increase. Net investment income before taxes for the three months was $31,048,000, compared to $17,552,000 in 2023, while net investment income for the nine months increased to $105,598,000 from $55,776,000. The net increase in net assets resulting from operations for the three months was $13,837,000, a turnaround from a loss of $27,423,000 in the prior year.

Distributions to shareholders for the nine months ended September 30, 2024, totaled $80,488,000, significantly higher than $27,208,000 in 2023. The total increase in net assets for the nine months was a decrease of $7,066,000, compared to a decrease of $96,287,000 in the previous year.

The company has transitioned its investment policy from primarily focusing on energy companies to a diversified credit investment strategy, effective September 29, 2023. This shift is reflected in the portfolio, where Senior Secured Loans—First Lien now account for 77.8% of investments, up from 52.9% at the end of 2023. The number of portfolio companies increased to 82 from 65.

The company’s financing arrangements include a facility with Barclays Bank for up to $500,000, with total outstanding borrowings of $84,121,000 as of September 30, 2024. The weighted average interest rate on borrowings was 8.43%. The company remains in compliance with all covenants related to its financing arrangements.

Overall, FS Specialty Lending Fund has shown significant growth in investment income and a strategic shift in its investment focus, while managing a decrease in total assets and cash reserves.