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Fifth Street Finance: Insider Ownership Updated

  • Fifth Street Finance (FSC) published a new presentation about the BDC.
  • The presentation confirms insiders now own 15% of the Company, including shares owned by Leonard Tannenbaum.
  • Tannenbaum is the CEO of the parent of FSC’s External Manager, Fifth Street Asset Management (FSAM).
  • Presentation says 22mn shares owned by insiders demonstrates “shareholder alignment”.
  • Not mentioned: many of shares purchased recently to retain control in (successful) Proxy fight against some shareholders.
  • Last major purchase by Tannenbaum back on August 12th, as per BDC Activist Alert.
  • BDC Activist says:” Whatever the reason for the insider purchases, we’d rather see the External Manager, directors and officers be invested in the stock than not”.
  • Adds: “However, economics are not fully “aligned” given that key insiders like Tannenbaum still gain most of their economic return from FSC’s management fees.”
  • Leo Tannenbaum-CEO of FSAM
    Leo Tannenbaum-CEO of FSAM