FS GLOBAL CREDIT OPPORTUNITIES FUND. Positioning the portfolio for long-term success

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1 FS GLOBAL CREDIT OPPORTUNITIES FUND Positioning the portfolio for long-term success 1

2 WHY THE CHANGE? BUILD A DIFFERENTIATED PORTFOLIO Reduce number of holdings to create a more concentrated portfolio of high-conviction ideas Focus on investments with return premiums driven by illiquidity, complexity or corporate events Target differentiated public investments + niche private investments MANAGE PORTFOLIO VOLATILITY Selectively rotate out of under-performing investments Selectively reduce investments with high correlation to the broader markets LOWER MANAGEMENT + INCENTIVE FEES Lower management fee from 2.00% to 1.50% 1,2 Waive incentive fees for one year 2 Supported by existing $30 million sponsor investment from FS employees and affiliates 3 PREPARE FOR LIQUIDITY EVENT 4 Build portfolio of differentiated value compared to public investment options Reduce annualized distribution amounts of FSGCO Funds 1 Based on gross assets. 2 Effective as of January 1, The adviser will waive 0.50% of based management fee for one year beginning January 1, Sponsor investment refers to proceeds from investors affiliated with FS Investments, including members of FSGCO s boards of trustees. As of November 6, The timing of any liquidity event is uncertain, cannot be assured and is subject to, among other factors, board approval and market conditions. 2

3 FS GLOBAL CREDIT OPPORTUNITIES FUND A CONTINUED FOCUS ON HIGH-CONVICTION INVESTMENTS A value-based approach to credit investing EVENT-DRIVEN OPPORTUNITIES Events may include corporate events, such as mergers or acquisitions MARKET PRICE INEFFICIENCIES Companies or industries that are out of favor with the broader markets SPECIAL SITUATIONS Mispricing of a loan or bond due to financial stress 3

4 FOCUS ON INVESTMENTS WITH ENHANCED RETURN OPPORTUNITIES Focus on niche, high-conviction investments while reducing portfolio volatility 75 Current number of portfolio companies 1 VS Targeted number of portfolio companies Target niche private investments + differentiated public investments (e.g. misunderstood by the market or have identifiable catalysts) Seek investments with return premiums driven by illiquidity, complexity or corporate events Rotate out of under-performing investments and investment with high correlation to the broader high yield market 1 As of September 30,

5 RESET DISTRIBUTION WITH THE GOAL TO GROW NAV AND PREPARE FOR A PUBLIC LISTING Distribution yield at NAV as of December 7, % 12% 10% 8% 6% 4% 2% 0% Pre-distributon cut 11.46% 11.46% 6.72% 6.72% Post-distribution cut Q1 2016: 9.0% High yield bond yield % 8.12% 5.37% 5.41% TODAY: 5.8% High yield bond yield % Fund-A Fund-D Fund-T Fund-T2 Fund-Adv 6.08% CURRENT GROSS NET FUND A&D $0.87 $0.51 $0.51 FUND ADV $0.66 $0.51 $0.46 FUND T & T2 $0.62 $0.51 $0.41 We believe this is a necessary step towards a liquidity event Never cut distribution amount since inception FS has provided ~$59 million to support distributions since FSGCO s inception Greater flexibility to generate total returns absent the need to focus on the highest income opportunities to meet the distribution While the market environment has changed significantly since the credit market downturn in 2015, the Fund s total return expectations remain the same 1 The payment of future distributions on the FSGCO funds common shares are subject to the discretion of the FSGCO funds board of trustees and applicable legal restrictions and, therefore, there can be no assurance as to the amount or timing of any such future distributions. 2 As of December 7, ICE Bank of America Merrill Lynch High Yield Bond Index yield-to-worst. 5

6 RESOURCES Website Webinars FSPROXY.COM WEBINARS PRESS RELEASES COMMUNICATION SAMPLES FREQUENTLY ASKED QUESTIONS INVITATIONS TO COME 6

7 APPENDIX 7

8 KEY PERSONNEL Andrew Beckman Mr. Beckman was formally a Partner and the Head of Corporate Credit and Special Situations at DW Partners. Prior to that he was with Magnetar Capital from Q where he served as Head of Event Credit and Head of the Magnetar Credit Opportunities Fund. He was also a member of both the Event Driven and Firmwide Investment Committees. As Head of Event Credit, he ran a special situations credit portfolio for the firm s multi strategy Event Driven business. Mr. Beckman also started and managed the special situations focused Credit Opportunities Fund. The focus for both vehicles was stressed debt, distressed debt, liquidations and opportunistic performing credit. He recruited, hired and built out the entire Event Credit team. Prior to joining Magnetar, Mr. Beckman was a Managing Director and Co-Head of Goldman Sachs Special Situations Group s Multi Strategy Investing business. In this capacity he served as the co-portfolio manager of a special situations focused investing business and managed a team of 10+ analysts and two traders. From , Mr. Beckman worked at Investcorp International in their North American private equity business. He was responsible for identifying, evaluating and executing leveraged buyout investments in a broad variety of industries. Mr. Beckman started his career at Salomon Smith Barney working in the Investment Bank s Mergers and Acquisitions Group. Mr. Beckman earned a B.S in Economics with a concentration in finance and management from the University of Pennsylvania s Wharton School of Business. 8

9 DISCLOSURES FORWARD-LOOKING STATEMENTS This presentation contains statements which constitute forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements with regard to future events or the future performance or operations of FS Global Credit Opportunities Fund (the Company ) and FS Investments. Words such as believes, expects, projects, and future or similar expressions are intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially include changes in the economy, risks associated with possible disruption to the Company s operations or the economy generally due to terrorism or natural disasters, future changes in laws or regulations and conditions in the Company s operating area, and failure to consummate the matters discussed in this presentation. The inclusion of forward-looking statements should not be regarded as a representation that any plans, estimates or expectations will be achieved. Any forward-looking statements speak only as of the date of this presentation. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on any forward-looking statements. 9