Fifth Street Management LLC is getting into the venture lending business through Fifth Street Technology Partners. The new group will be led by Michael David, former co-head of Orix Venture Finance LLC.
The group will be based in Silicon Valley with an additional office in Dallas and plans to make structured and secured debt investments ranging from $5 million to $50 million in rapidly growing, later-stage venture capital-backed companies.
"In addition to offering attractive risk-adjusted returns, we believe the venture finance sector offers compelling synergies with Fifth Street's nationwide sponsor origination platform," says chief investment officer Ivelin Dimitrov. "Venture debt is becoming increasingly attractive as traditional lenders retreat from smaller companies, and heightened scrutiny makes it unpalatable to raise another round of venture capital funding at lower valuations."
Fifth Street Management is a Greenwich, Conn.-based alternative asset manager and the investment adviser to two publicly-traded business development companies, Fifth Street Finance Corp. (NASDAQ:FSC) and Fifth Street Senior Floating Rate Corp. (NASDAQ:FSFR), which are both located in White Plains, NY. Fifth Street provides financing solutions to small and mid-sized companies, with the ability to hold loans up to $150 million and underwrite and syndicate transactions up to $250 million. For more on the company, see and “Fifth Street Takes New BDC Public” and “Fifth Street Enters ABL Market Through $110M Acquisition.”