Fifth Street Goes To Wall Street

While other members of the LBO world are waiting out the credit storm before going through with their IPOs, mid-market mezz lender Fifth Street Capital is plowing ahead.

The White Plains, N.Y.-based firm yesterday filed papers with the SEC to become a publicly traded business development company. Fifth Street is looking to raise $150 million in the offering. 

Fifth Street telegraphed this public-market play back in the spring, ironically enough as it was heading out to raise what will turn out to be its third and last institutional pool, a $400 million mezzanine fund. Fifth Street told the firm’s LPs that their partnership interests would be converted to shares in the new public company.

At the time, firm president Leonard Tannenbaum said that wasn’t always an easy sell.

“Once it clicks they realize how great it is for them and for us,” Tennenbaum told Buyouts’ Mark Cecil in April. “But it has to click.”

Fifth Street’s management does not harbor Blackstone-style ambitions of, um, generating liquidity for the founders with the IPO take. According to the SEC filing, Fifth Street expects to use “substantially all of the net proceeds from this offering to make investments in small and mid-sized companies.”

Fifth Street, founded in 1998, invests alongside sponsors in companies generating between $25 million and $250 million in revenue. The filing was made under the name Fifth Street Finance Corp. Goldman Sachs and UBS are the lead underwriters, joined by Wachovia Securities and BMO Capital Markets. No date for the offering was listed in the regulatory filing, except that it will take place in 2008.