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Fifth Street Finance Announces New Venture With Kemper Subsidiary

May 09, 2014, 07:46 AM
Filed Under: Industry News

Fifth Street Finance Corp. announced that it has formed a joint venture with Trinity Universal Insurance Company ("Trinity"), a subsidiary of Kemper Corporation, to create Senior Loan Fund JV I, LLC ("SLF JV I"). The joint venture is expected to invest primarily in middle market and other corporate debt securities, consistent with FSC's core origination and underwriting strategy.

FSC and Trinity have committed to provide $100 million of subordinated notes and equity to the joint venture, with FSC providing $87.5 million and Trinity providing $12.5 million. In addition, SLF JV I intends to seek up to $200 million in third party financing. FSC and Trinity anticipate beginning to fund the joint venture's portfolio with existing assets contributed from FSC.

"SLF JV I further deepens our long standing relationship with the investment team at Kemper, demonstrates the value of our affiliation with Fifth Street's leading middle market origination platform and expands the types of financing solutions available to our private equity clients," stated FSC's Chief Executive Officer, Leonard M. Tannenbaum, adding, "Growing SLF JV I should lead to a higher return on equity and net investment income per share at FSC, and represents another sign of progress toward implementing the strategic initiatives we previously outlined that should lead to improving earnings."

"We have invested with Fifth Street's platform several times over our eight-year relationship because Fifth Street is one of the more experienced originators, underwriters and managers of middle market credits," commented John M. Boschelli, Kemper's Chief Investment Officer, adding "We look forward to partnering with FSC and growing this new joint venture in order to invest in an attractively structured, high-yielding investment in which we have the discretion to approve the underlying investments."

Fifth Street Finance Corp. is a leading specialty finance company that provides custom-tailored financing solutions to small and mid-sized companies, primarily in connection with investments by private equity sponsors. The company originates and invests in one-stop financings, first lien, second lien, mezzanine debt and equity co-investments.

Kemper Corporation, with $8 billion in assets, is one of the nation's leading insurers. The Kemper family of companies specializes in property and casualty insurance and life and health insurance for individuals, families and small businesses. Kemper employs 6,000 associates who are dedicated to providing first-rate service to its customers. Servicing six million policies, Kemper's businesses collectively are represented by 20,000 independent agencies which sell insurance in 47 states and the District of Columbia.

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