Simpson Thacher is representing Oaktree Capital Management, L.P. in connection with an asset purchase agreement under which Oaktree will become the new investment adviser to two business development companies (“BDCs”): Fifth Street Finance Corp. (NASDAQ: FSC) and Fifth Street Senior Floating Rate Corp. (NASDAQ: FSFR). Oaktree will pay $320 million in cash to Fifth Street Management LLC upon the closing of the transaction. The transaction is expected to be completed in the fourth quarter of 2017 and is subject to the approval of the stockholders of Fifth Street Asset Management Inc. and the BDCs, Hart-Scott-Rodino antitrust clearance and other customary closing conditions.
The BDCs together have approximately $2.5 billion of assets under management across first lien, second lien, uni-tranche and mezzanine credits. Following the transaction, FSC will change its name to Oaktree Specialty Lending Corporation, and will trade under the ticker symbol OCSL; FSFR will change its name to Oaktree Strategic Income Corporation, and will trade under the ticker symbol OCSI.
Oaktree is a leader among global investment managers specializing in alternative investments, with $100 billion in assets under management as of March 31, 2017. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in distressed debt, corporate debt (including high yield debt and senior loans), control investing, convertible securities, real estate and listed equities.
The Simpson Thacher team includes Gary Horowitz, Elizabeth Cooper, Michael Reeves, Andrew Simon-Rooke and Catherine Maleki (M&A); Rajib Chanda (Registered Funds); Jennifer Levitt and Mimi Cheng (Credit); Jasmine Hay (Tax); Peter Guryan, Kelly Karapetyan and William Kearney (Antitrust); Marcela Robledo (Intellectual Property); and Steven DeLott (Insurance). The Simpson Thacher Registered Funds group will represent the BDCs following the closing of the transaction.