MSC Income Fund, formerly known as HMS Income Fund, is a principal investment fund that works to provide debt and equity financing solutions primarily to private U.S. companies. According to Hines Securities’ website, a new advisory agreement approved by HMS Income fund’s shareholders, the subsidiary of Main Street Capital Corporation that had been serving as the Fund’s sub-advisor is now the sole investment advisor and administrator of the Fund. Because of this transaction, HMS Income Fund is now known as MSC Income Fund, Inc.
According to its website, the Fund’s goal is to generate current income and capital appreciation for investors. Portfolio investments are typically made to support management buyouts, growth financings, refinancing, and acquisitions of companies that operate in diverse industry sectors. In July 2020, the Board voted to suspend all distributions to the Fund’s stockholders to preserve liquidity. This decision was made following market events caused by the global outbreak of Coronavirus and the impact on financial markets in U.S. as well as global economies.
The Fund saw a decrease in December 2019 when shares dropped from $8.00 to $7.95. This was followed by a 14.8% decrease from $7.80 to $6.65 in April 2020.
A secondary market for alternative investments listed shares of HMS Income Fund for $7.00/share in March of 2020, but sales allegedly did not sell at that price. Shares sold in the secondary market in December 2020 for $3.77/share. Thus, investors could have suffered substantial losses due to their investment in HMS Income Fund.
When HMS Income Fund was offered it was considered a speculative and high-risk investment. Investments in HMS Income Fund were not suitable for all investors. Advisors who recommended their clients to invest in HMS Income Fund or other similar investments may be liable for losses suffered by the clients. Under the FINRA Rules brokers and advisors are required to conduct reasonable due diligence and are only permitted to recommend investments that are suitable for the client’s risk tolerance and needs. Further, brokers are required to fully and accurately describe the risks and rewards of the investments they offer. Thus, brokers who misrepresent the investments, or recommend unsuitable investments may be liable for losses suffered.
If your advisor recommended HMS Income Fund, you may have a legal right to bring a claim to recover your losses. We represent investors on a contingency fee basis, meaning there are no upfront costs or fees to you. We may be able to file a FINRA Claim to recover damages you suffered due to the negligent or unsuitable recommendations from your broker. You can contact attorney Michael Bixby directly at Mbixby@levinlaw.com to discuss your potential claim, or fill out an evaluation form or give us a call and we will provide a complimentary review of your potential claim.
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