Oaktree Capital Group is taking over Fifth Street Finance (FSC) and Fifth Street Floating Rate (FSFR). It will buy the management contracts from Fifth Street Asset Management for $320 million.
This occurs just weeks after TCG BDC IPO, marking another entry of a highly-respected asset manager into the public BDC industry.
- Fees. FSC and FSFR’s incentive fees will fall to 17.5% from 20%. FSC’s management fee will drop to 1.5% of assets, down from 1.75%.
- Board of directors. Oaktree is almost completely replacing the boards of both BDCs.
- Performance? That’s what everyone hopes. Fifth Street’s BDCs have poor historical performance. Oaktree’s funds have been almost universal successes.