Former co-head and managing director of ORIX Venture Finance, Michael David – who has 20 years of industry experience – will lead the new group. Amongst his team will be professionals that previously deployed over $1bn of capital to over 100 companies.
The new company will make structured and secured debt investments from $5m to $50m into rapidly growing, later stage VC-backed companies, while focusing on technology, internet, healthcare information technology, and life sciences.
An additional office will be opened in Dallas, strengthening Fifth Street’s national presence outside of its core middle-market lending business.
David said, ‘As later stage companies exit the venture capital phase, they become natural candidates for financing in conjunction with sponsor-led buyouts.
‘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.’
Ivelin Dimitrov, Fifth Street’s CIO, added, ‘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.
‘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.’
Copyright © 2013 AltAssets