State Borrows $5 Million To Lure Lender To Greenwich

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The State Bond Commission approved borrowing $5 million Friday in order to lend $4 million and give a grant of $1 million to FSC CT Inc., the administrator and affiliate of Fifth Street Finance Corp. The company will move 51 jobs from White Plains to Greenwich. It was already leasing some office space at 2 Greenwich Office Park, but the state did not say in its announcement how many people were working there. It also has an office in Chicago.

Fifth Street has a network of interconnected publicly traded and private companies. According to its annual report:

“We have elected to be treated for federal income tax purposes as a regulated investment company, or RIC. As a RIC, we generally will not have to pay corporate-level federal income taxes on any net ordinary income or capital gains that we distribute to our stockholders if we meet certain source-of-income, distribution and asset diversification requirements.”

The annual report also says that the management fee and incentives paid to the senior executives were $45.8 million in fiscal year 2012. The company pays its top managers in a similar fashion to a hedge fund, known as a 2 and 20 arrangement; they are paid 2 percent of assets and 20 percent of net investment income and capital gains.

In the terms of the state money, $1 million of the loan is forgiven once the employees arrive; another $2 million can be forgiven if the company adds 45 more workers.

The lender does two kinds of business  — lending in the mid-market, and participating in private equity deals.

The company will buy a 44,000-square-foot building in Greenwich, and its work on the space is expected to support 498 construction jobs.

“We are thrilled to relocate our operations to the State of Connecticut,” said CEO Leonard Tannenbaum.  “When completed, our new headquarters in Greenwich will support the rapid growth of our company and the overall Fifth Street platform, while maximizing the efficiency of our organization….  We appreciate the Governor’s vision to support the continued growth of Greenwich as a major financial services hub.”

The $1 million grant will cover the installation of either a fuel cell, solar panels or wind power at the headquarters and job training for the 45 new employees.

“We are grateful for the state support for companies to locate in our area.  The Greenwich-Stamford corridor continues to thrive as an economic engine and job creator,” said Rep. Livvy Floren (R-Greenwich).

The company is currently advertising for analysts, a digital designer, a vice president of underwriting and an executive assistant.

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4 thoughts on “State Borrows $5 Million To Lure Lender To Greenwich

  1. pete

    YOU mean DANNY BOY commanded and stole more of OUR MONEY to give it to a greedy PIG businessman. Remember the bond commission does what DANNY BOY tells them do to. If the ‘RATS like DANNY BOY and barrack CARE SO MUCH about the MIDDLE CLASS then CUT OUR TAXES and STOP giving OUR MONEY TO PIGS

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