Fifth Street Management Launches Venture Lending Business
Fifth Street Management announced its entry into venture lending through Fifth Street Technology Partners. The new group will be led by Michael David, former co-head and managing director of ORIX Venture Finance and a 20-year industry veteran. The team of seasoned professionals was previously part of a group that deployed over $1 billion of capital to more than 100 companies.
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. The group will enhance Fifth Street’s sector expertise in technology, internet and healthcare information technology, with a subsequent focus on life sciences.
“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,” stated Ivelin Dimitrov, Fifth Street’s chief investment officer. “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.”
“As later stage companies exit the venture capital phase, they become natural candidates for financing in conjunction with sponsor-led buyouts,” said David. “We are delighted to continue fostering growth with a highly-regarded, like-minded lender, whose stable capital base and quick decision-making process can help deliver the best financing solutions for our clients.”