HOLDINGS BY INVESTMENT TYPE 1,2 HOLDINGS BY INDUSTRY 1

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FS Investment Corporation III 2015 SECOND QUARTER HOLDINGS AS OF JUNE 30, 2015 FS Investment Corporation III (FSIC III) is an alternative investment fund that invests primarily in senior secured

1 FS Investment Corporation III 2015 SECOND QUARTER HOLDINGS AS OF JUNE 30, 2015 FS Investment Corporation III (FSIC III) is an alternative investment fund that invests primarily in senior secured loans and other debt securities of private U.S. companies. It is designed to provide a high level of current income. FLOATING INTEREST RATE FOCUS 1,2 75% FLOATING RATE INVESTMENTS 1 Calculated as a percentage of fair value. Fair value is determined by FSIC III s board of directors. 2 Includes investments held by FSIC III and the assets underlying FSIC III s total return swap (TRS) financing arrangement with Citibank, N.A. Excluding investments held under the TRS, floating rate investments comprised 69% of FSIC III s investment portfolio and investment allocations were 50% senior secured loans 1st lien, 19% senior secured loans 2nd lien, 7% senior secured bonds, 22% subordinated debt, 1% collateralized securities and 1% equity/other. HOLDINGS BY INVESTMENT TYPE 1,2 HOLDINGS BY INDUSTRY 1 Senior secured loans 1st lien...57% Senior secured loans 2nd lien...18% Senior secured bonds... 6% Subordinated debt...18% Collateralized securities...<1% Equity/other... 1% Energy...19% Software & services...16% Consumer services...14% Materials...9% Capital goods...9% Commercial & professional services...7% Technology hardware & equipment...6% Media...5% Diversified financials...4% Consumer durables & apparel...3% Automobiles & components...3% Transportation...2% Retailing...1% Real estate...1% Health care equipment & services...1% Telecommunication services...<1% Food & staples retailing...<1% Food, beverage & tobacco...<1% Household & personal products...<1% Insurance...<1% An investment in FSIC III involves a high degree of risk and may be considered speculative. Investors are advised to consider the investment objectives, risks, and charges and expenses of FSIC III carefully before investing. The prospectus contains this and other information about FSIC III. Investors may obtain a copy of the prospectus free of charge at or by contacting Franklin Square Capital Partners (Franklin Square) at 201 Rouse Boulevard, Philadelphia, PA or by phone at Investors should read and carefully consider all information found in the prospectus and FSIC III s other reports filed with the U.S. Securities and Exchange Commission before investing. This is neither an offer to sell nor a solicitation of an offer to buy the securities described herein. No offering is made to New York investors except by a prospectus filed with the Department of Law of the State of New York. An offering is made only by a prospectus. FSIC III may invest in below investment grade securities (commonly referred to as high yield securities or junk bonds ), which may have predominantly speculative characteristics with respect to the issuer s capacity to pay interest and repay principal. Investments in high yield securities should be considered speculative. This brochure is intended as informational only and is not intended as investment advice or for trading purposes. For additional information, contact your financial advisor. Percentages and other numbers in this brochure may have been rounded. Franklin Square Capital Partners is not affiliated with Franklin Resources/Franklin Templeton Investments or the Franklin Funds.

2 FS Investment Corporation III 2015 SECOND QUARTER HOLDINGS The tables below exclude investments underlying FSIC III s total return swap (TRS) financing arrangement with Citibank, N.A. 50% SENIOR SECURED LOANS FIRST LIEN Acision Finance LLC 1.8% Software & Services Reading, United L % 12/15/18 Advantage Sales & Marketing Inc. 0.1% Commercial & Professional Services Irvine, CA L % 7/23/21 Allen Systems Group, Inc. 1.0% Software & Services Naples, FL L+790, 1.2% PIK (1.2% 1.0% 4/30/20 Altus Power America, Inc. f 0.1% Energy Greenwich, CT L % 10/10/21 Aspect Software, Inc. e 1.3% Software & Services Chelmsford, MA L % 5/7/16 Atlas Aerospace LLC 1.8% Capital Goods Wichita, KS L % 5/8/19 Atlas Aerospace LLC f 0.0% Capital Goods Wichita, KS L % 5/8/19 ATX Networks Corp. e 0.7% Technology Hardware & Equipment Ajax, Ontario L % 6/11/21 BenefitMall Holdings, Inc. f 2.3% Commercial & Professional Services Dallas, TX L % 11/24/20 Blue Coat Holdings, Inc. f 0.0% Technology Hardware & Equipment Sunnyvale, CA L % 5/20/20 Blueprint Sub, Inc. f 3.4% Software & Services Cincinnati, OH L % 5/7/21 Blueprint Sub, Inc. f 0.0% Software & Services Cincinnati, OH L % 5/7/21 BMC Software Finance, Inc. f 0.0% Software & Services Houston, TX L+400 9/10/18 Cactus Wellhead, LLC 0.7% Energy Houston, TX L % 7/31/20 Caesars Entertainment 0.3% Consumer Services Las Vegas, NV L+575 3/1/17 Operating Co., Inc. g Caesars Entertainment 0.1% Consumer Services Las Vegas, NV L+675 3/1/17 Operating Co., Inc. g CEVA Group Plc e,f 0.0% Transportation Ashby-de-la-Zouch, United L+500 3/19/19 CITGO Holding, Inc. 1.2% Energy Houston, TX L % 5/12/18 Corner Investment PropCo, LLC 0.9% Consumer Services Las Vegas, NV L % 11/2/19 Digital River, Inc. 0.7% Software & Services Minnetonka, MN L % 2/12/21 Fairway Group Acquisition Co. 0.3% Food & Staples Retailing New York, NY L % 8/17/18 Fox Head, Inc. 0.1% Consumer Durables & Apparel Irvine, CA L % 12/19/20 Greystone Bridge VIII LLC f 1.3% Real Estate New York, NY L /1/20 H.M. Dunn Company, Inc. 0.6% Capital Goods Euless, TX L % 3/26/21 H.M. Dunn Company, Inc. f 0.0% Capital Goods Euless, TX L % 3/26/21 Hybrid Promotions, LLC 0.4% Consumer Durables & Apparel Cypress, CA L % 12/19/20 Industrial Group Intermediate Holdings, LLC 0.4% Materials Norristown, PA L % 5/31/20 Latham Pool Products, Inc. 2.9% Capital Goods Latham, NY L % 6/29/21 Mood Media Corp. 0.0% Media Toronto, Ontario L % 5/1/19 Murray Energy Corp. 0.6% Energy St. Clairsville, OH L % 4/16/20 Nobel Learning Communities, Inc. 5.5% Consumer Services West Chester, PA L % 4/27/21 Nobel Learning Communities, Inc. f 0.0% Consumer Services West Chester, PA L % 4/27/20 Panda Temple Power, LLC 0.9% Energy Dallas, TX L % 3/6/22 PHRC License, LLC 1.0% Consumer Services Orlando, FL L % 8/14/20 Polymer Additives, Inc. 1.3% Materials Independence, OH L % 12/20/21 Production Resource Group, LLC 3.4% Media Armonk, NY L % 7/23/19 Reddy Ice Corp. 0.3% Food, Beverage & Tobacco Dallas, TX L % 5/1/19 Sable International Finance Ltd. 0.3% Media London, United L % 4/28/17

3 SENIOR SECURED LOANS FIRST LIEN (CONTINUED) Serena Software, Inc. 0.1% Software & Services San Mateo, CA L % 4/14/20 ServiceMaster Co., LLC f 0.0% Commercial & Professional Services Memphis, TN L+325 7/1/19 Sorenson Communications, Inc. 0.3% Telecommunication Services Salt Lake City, UT L % 4/30/20 Southcross Holdings Borrower LP 0.0% Energy Dallas, TX L % 8/4/21 Sports Authority, Inc. 0.2% Consumer Durables & Apparel Englewood, CO L % 11/16/17 Stardust Finance Holdings, Inc. 0.2% Materials Maidenhead, United L % 3/13/22 Stonewall Gas Gathering LLC 0.9% Capital Goods East Charleston, WV L % 1/28/22 SunGard Availability Services Capital, Inc. 1.5% Software & Services Wayne, PA L % 3/29/19 SunGard Availability Services 0.0% Software & Services Wayne, PA L+450 3/8/18 Capital, Inc. f Sunnova Asset Portfolio 0.8% Energy Houston, TX 12.0% PIK 5 Holdings, LLC f (12.0% 11/14/21 Telx Group, Inc. 0.2% Software & Services New York, NY L % 4/9/20 U.S. Xpress Enterprises, Inc. 0.9% Transportation Chattanooga, TN L+1,050, 0.0% PIK (1.8% 1.5% 5/30/19 UTEX Industries, Inc. 0.1% Energy Houston, TX L % 5/21/21 Vertellus Performance Chemicals LLC 2.7% Materials Indianapolis, IN L % 1/30/20 Warren Resources, Inc. f 1.8% Energy New York, NY L % 5/22/20 Waste Pro USA, Inc. f 2.0% Commercial & Professional Services Longwood, FL L % 10/15/20 Weight Watchers 0.5% Consumer Services New York, NY L+300 4/2/16 International, Inc. e Weight Watchers 0.6% Consumer Services New York, NY L % 4/2/20 International, Inc. e Winchester Electronics Corp. 1.4% Technology Hardware & Equipment Norwalk, CT L % 11/17/20 Winchester Electronics Corp. f 0.2% Technology Hardware & Equipment Norwalk, CT L % 11/17/20

4 FS Investment Corporation III 2015 SECOND QUARTER HOLDINGS 19% SENIOR SECURED LOANS SECOND LIEN AdvancePierre Foods, Inc. e 0.1% Food & Staples Retailing Cincinnati, OH L % 10/10/17 Advantage Sales & Marketing Inc. 0.3% Commercial & Professional Services Irvine, CA L % 7/25/22 Affordable Care, Inc. 0.8% Health Care Equipment & Services Raleigh, NC L % 12/26/19 Alison US LLC 0.3% Capital Goods Mannheim, Germany L % 8/29/22 American Energy Marcellus, LLC 0.2% Energy Oklahoma City, OK L % 8/4/21 Ascent Resources Utica, LLC 0.0% Energy Oklahoma City, OK L+950, 2.0% 1.5% 9/30/18 PIK (2.0% Atlas Resource Partners, L.P. 2.2% Energy Philadelphia, PA L % 2/23/20 BBB Industries US Holdings, Inc. 1.6% Automobiles & Components Mobile, AL L % 11/3/22 BlackBrush Oil & Gas, L.P. 0.5% Energy San Antonio, TX L % 7/30/21 BRG Sports, Inc. 0.2% Consumer Durables & Apparel Scotts Valley, CA L % 4/15/22 Byrider Finance, LLC 0.2% Automobiles & Components Carmel, IN L % 8/22/20 CDS U.S. Intermediate 0.6% Media Montreal, Quebec L % 7/10/23 Holdings, Inc. e Chief Exploration & Development LLC 0.1% Energy Dallas, TX L % 5/16/21 ColourOz Investment 2 LLC 0.1% Materials Luxembourg City, Luxembourg L % 9/5/22 Compuware Corp. 1.0% Software & Services Detroit, MI L % 12/15/22 Crossmark Holdings, Inc. 0.1% Commercial & Professional Services Plano, TX L % 12/21/20 Emerald Performance Materials, LLC 0.2% Materials Cuyahoga Falls, OH L % 8/1/22 Fieldwood Energy LLC 0.3% Energy Houston, TX L % 9/30/20 Inmar, Inc. 0.3% Software & Services Winston Salem, NC L % 1/27/22 Jazz Acquisition, Inc. 0.1% Capital Goods Springville, UT L % 6/19/22 Jonah Energy LLC 0.2% Energy Denver, CO L % 5/12/21 MD America Energy, LLC 0.6% Energy Fort Worth, TX L % 8/4/19 National Surgical Hospitals, Inc. 0.3% Health Care Equipment & Services Chicago, IL L % 6/1/23 Neff Rental LLC 1.8% Capital Goods Miami, FL L % 6/9/21 Nielsen & Bainbridge, LLC 0.4% Consumer Services Austin, TX L % 8/15/21 Peak 10, Inc. 0.7% Software & Services Charlotte, NC L % 6/17/22 Pelican Products, Inc. 0.3% Capital Goods Torrance, CA L % 4/9/21 Printpack Holdings, Inc. 0.6% Materials Atlanta, GA L % 5/28/21 Sequential Brands Group, Inc. 1.8% Consumer Durables & Apparel New York, NY L % 4/8/21 Spencer Gifts LLC 1.3% Retailing Egg Harbor Township, NJ Stardust Finance Holdings, Inc. 1.0% Materials Maidenhead, United L+825 6/29/22 L % 3/13/23 Templar Energy LLC 0.3% Energy Oklahoma City, OK L % 11/25/20 Ultima US Holdings LLC 0.2% Capital Goods Munster, Germany L % 12/31/20 UTEX Industries, Inc. 0.1% Energy Houston, TX L % 5/20/22 Vantage Energy II, LLC 0.1% Energy Englewood, CO L % 5/8/17 Vouvray US Finance LLC 0.4% Transportation Glasgow, Scotland L % 12/27/21

5 7% SENIOR SECURED BONDS Algeco Scotsman Global Finance Plc 1.0% Commercial & Professional Services London, United American Energy Woodford, LLC 0.1% Energy Oklahoma City, OK 12.0% PIK (12.0% 8.5% 10/15/18 12/30/20 Aspect Software, Inc. 1.4% Software & Services Chelmsford, MA 10.6% 5/15/17 Avaya Inc. 1.5% Technology Hardware & Equipment Santa Clara, CA 10.5% 3/1/21 Comstock Resources, Inc. 0.2% Energy Frisco, TX 10.0% 3/15/20 Global A&T Electronics Ltd. 0.8% Technology Hardware & Equipment Singapore, Singapore 10.0% 2/1/19 iheartcommunications, Inc. 0.2% Media San Antonio, TX 10.6% 3/15/23 Logan's Roadhouse, Inc. 0.5% Consumer Services Nashville, TN 10.8% 10/15/17 Modular Space Corp. 0.0% Capital Goods Berwyn, PA 10.3% 1/31/19 SandRidge Energy, Inc. 0.7% Energy Oklahoma City, OK 8.8% 6/1/20 Tembec Industries Inc. 0.5% Materials Montreal, Quebec 9.0% 12/15/19 22% SUBORDINATED DEBT Algeco Scotsman Global Finance Plc 0.8% Commercial & Professional Services London, United 10.8% 10/15/19 Alta Mesa Holdings, LP 0.0% Energy Houston, TX 9.6% 10/15/18 Atlas Energy Holdings Operating Co., LLC 0.0% Energy Philadelphia, PA 7.8% 1/15/21 Bellatrix Exploration Ltd. 0.6% Energy Calgary, Alberta 8.5% 5/15/20 Blue Coat Holdings, Inc. 1.7% Technology Hardware & Equipment Sunnyvale, CA 8.4% 6/1/23 BWAY Holding Co. 0.4% Materials Atlanta, GA 9.1% 8/15/21 Calumet Specialty Products Partners, L.P. 0.7% Energy Indianapolis, IN 7.8% 4/15/23 Canbriam Energy Inc. 1.3% Energy Calgary, Alberta 9.8% 11/15/19 CEC Entertainment, Inc. 1.3% Consumer Services Irving, TX 8.0% 2/15/22 Ceridian Corp. 1.4% Software & Services Minneapolis, MN 11.0% 3/15/21 Communications Sales & Leasing, Inc. 0.1% Telecommunication Services Little Rock, AR 8.3% 10/15/23 Eclipse Resources Corp. e 0.6% Energy State College, PA 8.9% 7/15/23 Elizabeth Arden, Inc. 0.2% Household & Personal Products Miramar, FL 7.4% 3/15/21 Global Jet Capital Inc. 0.0% Commercial & Professional Services Boca Raton, FL 15.0%, 0.0% PIK (15.0% Global Jet Capital Inc. 0.3% Commercial & Professional Services Boca Raton, FL 15.0%, 0.0% PIK (15.0% 1/30/25 4/30/25

6 FS Investment Corporation III 2015 SECOND QUARTER HOLDINGS SUBORDINATED DEBT (CONTINUED) Jupiter Resources Inc. 1.7% Energy Calgary, Alberta 8.5% 10/1/22 Legacy Reserves LP 0.3% Energy Midland, TX 6.6% 12/1/21 Legacy Reserves LP 0.1% Energy Midland, TX 8.0% 12/1/20 Lightstream Resources Ltd. 0.2% Energy Calgary, Alberta 8.6% 2/1/20 Linn Energy, LLC 0.1% Energy Houston, TX 6.3% 11/1/19 Linn Energy, LLC 0.0% Energy Houston, TX 6.5% 9/15/21 Linn Energy, LLC 0.1% Energy Houston, TX 7.8% 2/1/21 Linn Energy, LLC 0.0% Energy Houston, TX 8.6% 4/15/20 Navistar International Corp. 0.6% Transportation Lisle, IL 8.3% 11/1/21 NewStar Financial, Inc. 2.5% Diversified Financials Boston, MA 8.3%, 0.0% PIK (8.8% 12/4/24 Northern Oil and Gas, Inc. 0.2% Energy Wayzata, MN 8.0% 6/1/20 P.F. Chang's China Bistro, Inc. 2.6% Consumer Services Scottsdale, AZ 10.3% 6/30/20 PriSo Acquisition Corp. 1.7% Materials Irving, TX 9.0% 5/15/23 Samson Investment Co. g,h 0.1% Energy Tulsa, OK 9.8% 2/15/20 SandRidge Energy, Inc. 0.4% Energy Oklahoma City, OK 8.8% 1/15/20 SunGard Availability Services Capital, Inc. 0.7% Software & Services Wayne, PA 8.8% 4/1/22 Talos Production LLC 0.3% Energy Houston, TX 9.8% 2/15/18 TI Group Automotive Systems, LLC. 0.7% Automobiles & Components Auburn Hills, MI 8.8% 7/15/23 TIBCO Software Inc. 0.3% Software & Services Palo Alto, CA 11.4% 12/1/21 York Risk Services Holding Corp. 0.2% Insurance Parsippany, NJ 8.5% 10/1/22 1% COLLATERALIZED SECURITIES NewStar Clarendon A Class D NewStar Clarendon A Class Subord. B 0.1% Diversified Financials Boston, MA L+435 1/25/27 0.5% Diversified Financials Boston, MA 12.5% 1/25/27

7 1% EQUITY/OTHER PORTFOLIO COMPANY a WEIGHTING b INDUSTRY LOCATION c ACP FH Holdings GP, LLC, Common Equity g 0.0% Consumer Durables & Apparel Irvine, CA ACP FH Holdings, LP, Common Equity g 0.1% Consumer Durables & Apparel Irvine, CA Altus Power America Holdings, LLC, Preferred Equity g 0.0% Energy Greenwich, CT Global Jet Capital Holdings, LP, Preferred Equity g 0.2% Commercial & Professional Services Boca Raton, FL Industrial Group Intermediate Holdings, LLC, Common Equity g 0.0% Materials Norristown, PA NewStar Financial, Inc., Warrants g 0.7% Diversified Financials Boston, MA FSIC III may fit within your overall investment strategy. It is intended for investors: Looking for current income and, to a lesser extent, capital appreciation Seeking to diversify their fixed income portfolio for a rising interest rate environment Who want a defensive investment approach focused on long-term performance and principal protection To find out more, please consult with your financial advisor. You can also visit our website, Working with the right financial advisor is a vital part of having a sound financial plan, particularly when considering alternative investments. This is why Franklin Square Capital Partners funds are only available through financial advisors. A financial advisor can help you assess your financial goals based on your investment time frame and understand your tolerance for risk. Using these factors, your advisor can help you allocate your portfolio according to your financial situation, as well as understand the risks and rewards of various investments. a Security may be an obligation of one or more entities affiliated with the named company. b Calculated as a percentage of fair value. Fair value is determined by FSIC III s board of directors. c Location represents the geographic location in which the portfolio company is headquartered or has its principal operating location. d Certain floating rate securities in FSIC III s portfolio bear interest at a rate determined by a publicly disclosed base rate plus a basis point spread. L, or LIBOR, is the London Interbank Offered Rate; Prime is the U.S. Prime Lending Rate. As of June 30, 2015, three-month LIBOR was 0.28% and Prime was 3.25%. e Position or portion thereof unsettled as of June 30, f Weighting percentage shown net of unfunded commitment amount. g Security is non-income producing. h Security was on non-accrual status as of June 30, 2015.

8 RISK FACTORS Investing in FSIC III may be considered speculative and involves a high level of risk, including the risk of a substantial loss of investment. The following are some of the risks an investment in FSIC III s common stock involves; however, you should carefully consider all of the information found in the section of FSIC III s prospectus entitled Risk Factors before deciding to invest in shares of FSIC III s common stock. Because there is no public trading market for shares of FSIC III s common stock and FSIC III is not obligated to effectuate a liquidity event by a specified date, if at all, it is unlikely that you will be able to sell your shares. If you are able to sell your shares before FSIC III completes a liquidity event, it is likely that you will receive less than you paid for them. While FSIC III intends to conduct quarterly tender offers for its shares, only a limited number of shares will be eligible for repurchase and FSIC III may amend, suspend or terminate the share repurchase program at any time. In addition, any such repurchases will be at a 10% discount to the current offering price on the date of repurchase. FSIC III intends to invest in securities that are rated below investment grade by rating agencies or that would be rated below investment grade if they were rated. Below investment grade securities, which are often referred to as junk, have predominantly speculative characteristics with respect to the issuer s capacity to pay interest and repay principal. They may also be difficult to value and illiquid. FSIC III s distributions may be funded from unlimited amounts of offering proceeds or borrowings, which may constitute a return of capital and reduce the amount of capital available to FSIC III for investment. Any capital returned to stockholders through distributions will be distributed after payment of fees and expenses. An investment strategy focused primarily on privately held companies presents certain challenges, including the lack of available information about these companies. Investing in middle-market companies involves a number of significant risks, any one of which could have a material adverse effect on FSIC III s operating results. A lack of liquidity in certain of FSIC III s investments may adversely affect its business. FSIC III is subject to financial market risks, including changes in interest rates, which may have a substantial negative impact on its investments. FSIC III has borrowed funds to make investments, which increases the volatility of its investments and may increase the risks of investing in its securities. FSIC III has limited operating history and is subject to the business risks and uncertainties associated with any new business. If FSIC III is unable to raise substantial funds in its ongoing, continuous best efforts public offering, then FSIC III will be more limited in the number and type of investments it may make. FSIC III is a long-term investment for persons of adequate financial means who have no need for liquidity in their investment. To invest in FSIC III, an investor must have either (i) a net worth of at least $70,000 and an annual gross income of at least $70,000, or (ii) a net worth of at least $250,000. Some states impose higher suitability standards. Please consult the prospectus for a detailed description of the suitability standards imposed on investors, including heightened standards required by certain states. FSIC III s previous distributions to stockholders were funded in significant part from the reimbursement of certain expenses, including through the waiver of certain investment advisory fees that are subject to repayment to its affiliate, Franklin Square, and FSIC III s future distributions may be funded from such waivers and reimbursements. Significant portions of these distributions may not be based on FSIC III s investment performance and such waivers and reimbursements by Franklin Square may not continue in the future. If Franklin Square were not to reimburse certain of FSIC III s expenses, including through the waiver of certain of its advisory fees, significant portions of these distributions may come from offering proceeds or borrowings. The repayment of any amount owed to Franklin Square will reduce the future distributions to which you would otherwise be entitled. 201 Rouse Boulevard Philadelphia, PA Member FINRA/SIPC FS 2 Capital Partners, LLC (FS 2 Capital), the dealer manager for FSIC III s public offering, is an affiliate of FSIC III s investment adviser and serves or has served as the dealer manager for the public offerings of shares by other non-traded funds sponsored by Franklin Square. These relationships may create conflicts in connection with FS 2 Capital s due diligence obligations under the federal securities laws. FS 2 Capital is entitled to compensation in connection with this offering, including receiving selling commissions (which are generally re-allowed to selling broker-dealers) and dealer manager fees based on the gross offering proceeds of shares sold in the offering. FS 2 Capital may also be reimbursed for accountable due diligence expenses based on the gross offering proceeds of shares sold in this offering. In addition, FSIC III s investment adviser and its affiliates may face conflicts of interest as a result of compensation arrangements, time constraints and competition for investments, which they will attempt to resolve in a fair and equitable manner Franklin Square Capital Partners BR-IC3-HOLD CRW 8/2015

FS INVESTMENT CORPORATION IV

Q1 Holdings brochure FS INVESTMENT CORPORATION IV FS Investment Corporation IV (FSIC IV) is an alternative investment fund that invests primarily in floating rate, senior secured loans of private U.S.