Alternative investment structures + offerings

Alternative investment structures + offerings

Education > Know your alternatives > Structures + offerings


Alternative investment structures + offerings

Access alternatives through diverse investment structures and offerings


Ways to access alternatives

Business development companies

Business development companies (BDCs) are closed-end funds that primarily invest in private U.S. companies.

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Closed-end funds

Closed-end funds pool shareholder assets to invest in a wide range of securities including alternatives like private equity and private credit.

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Evergreen funds

Evergreen funds are perpetually offered and allow investors to purchase or redeem shares on a periodic basis.

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Interval funds

Interval funds are a type of closed-end fund that offers the ability to invest across a wide range of strategies, securities and asset classes.

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Private placements

Private placements are securities sold to a limited pool of pre-selected investors—typically higher net worth individuals or institutions.

Mutual funds

Mutual funds are open-end investment companies that provide access to professionally managed, diversified portfolios of securities.

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Real estate income trusts

Real estate income trusts (REITs) are companies that own, operate or finance income-producing real estate assets—allowing investors to earn dividends from these properties.

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Understanding the liquidity spectrum

Funds that allow investors to purchase or redeem their investment on an intraday or daily basis are referred to as liquid. On the other hand, funds that limit redemption frequency over longer intervals are referred to as less liquid or illiquid. Some less-liquid funds offer liquidity on a monthly, quarterly or annual basis, while illiquid funds may require hold periods of up to ten years. 

Liquidity is the ease with which an investment can be bought or sold without significantly impacting the price of the security. 

Liquid investments are investments that can be easily bought or sold.

Illiquid investments are investments that cannot be easily bought or sold.

There are two ways liquidity applies to investing:

  • The liquidity of individual securities
  • The liquidity of the fund or investment vehicle used to invest in those securities

Thinking about liquidity as a spectrum may help investors understand how liquidity relates to different assets. 

Liquidity spectrum of types of investment structures.

Investor considerations

Investing in alternatives is different than investing in traditional investments such as stocks and bonds. Alternatives tend to be illiquid and highly specialized. In the context of alternative investments, higher returns may be accompanied by increased risk and, like any investment, the possibility of an investment loss. Investments made in alternatives may be less liquid and harder to value than investments made in large, publicly traded corporations. When building a portfolio that includes alternative investments, financial professionals and their investors should first consider an individual’s financial objectives. Investment constraints such as risk tolerance, liquidity needs and investment time horizon should be determined.

A deeper dive

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Interval funds

Our interval funds seek to generate an attractive level of current income and potential for capital appreciation.

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Market updates from our Chief Market Strategist

Your guide for making the most of your assets. Stay up to date on market and industry trends with insights from our experts.

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Explore our funds

FS Investments provides access to a broad suite of alternative asset classes and strategies.

Interval funds

Our interval funds seek to generate an attractive level of current income and potential for capital appreciation.

Market updates from our Chief Market Strategist

Your guide for making the most of your assets. Stay up to date on market and industry trends with insights from our experts.

Explore our funds

FS Investments provides access to a broad suite of alternative asset classes and strategies.

People sitting around a meeting table.

Powering your portfolio

FS Investments is committed to providing greater access and transparency to investors in the alternatives space. Through our investment teams and investment partnerships, in-house research experts and valuable programs that help to educate and engage advisors and their clients.

The largest impediment to more productive client conversations about alternatives is likely a knowledge gap. Investors may be hesitant to expand into alternatives due to their unfamiliarity with, and lack of exposure to alternative investment strategies.

View important footnotes + disclosures

This information is educational in nature and does not constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. FS Investments is not adopting, making a recommendation for or endorsing any investment strategy or particular security. All views, opinions and positions expressed herein are that of the author and do not necessarily reflect the views, opinions or positions of FS Investments. All opinions are subject to change without notice, and you should always obtain current information and perform due diligence before participating in any investment. FS Investments does not provide legal or tax advice and the information herein should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact any investment result. FS Investments cannot guarantee that the information herein is accurate, complete, or timely. FS Investments makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.

Any projections, forecasts and estimates contained herein are based upon certain assumptions that the author considers reasonable. Projections are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results. The inclusion of projections herein should not be regarded as a representation or guarantee regarding the reliability, accuracy or completeness of the information contained herein, and neither FS Investments nor the author are under any obligation to update or keep current such information.

All investing is subject to risk, including the possible loss of the money you invest.

This information is educational in nature and does not constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. FS Investments is not adopting, making a recommendation for or endorsing any investment strategy or particular security. All views, opinions and positions expressed herein are that of the author and do not necessarily reflect the views, opinions or positions of FS Investments. All opinions are subject to change without notice, and you should always obtain current information and perform due diligence before participating in any investment. FS Investments does not provide legal or tax advice and the information herein should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact any investment result. FS Investments cannot guarantee that the information herein is accurate, complete, or timely. FS Investments makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.

Any projections, forecasts and estimates contained herein are based upon certain assumptions that the author considers reasonable. Projections are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying the projections will not materialize or will vary significantly from actual results. The inclusion of projections herein should not be regarded as a representation or guarantee regarding the reliability, accuracy or completeness of the information contained herein, and neither FS Investments nor the author are under any obligation to update or keep current such information.

All investing is subject to risk, including the possible loss of the money you invest.

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