Published in the May issue of Bloomberg Markets
By Jon Asmundsson
When Leonard Tannenbaum set up shop in the basement of an office building in Mount Kisco, New York, his plan for his one-man investing business was about as basic as you can get. “Early on, the idea was to make money,” Tannenbaum says. “How do I make money? How do I get an edge?”
It was 1998, and he was 27 years old, a Wharton MBA with two years as an analyst at Merrill Lynch and a couple of stints at fund firms, Bloomberg Markets reports in its May issue. He even sublet out half of the 800-square-foot (74-square-meter) space. Tannenbaum asked himself: “Is there a better mousetrap to develop?”
The mousetrap Tannenbaum built almost made him a billionaire last year. When the initial public offering of Fifth Street Asset Management was being marketed at $24 to $26 a share, Tannenbaum’s stake in the company would have been worth more than $1 billion at the upper end of the initial range.
Now headquartered in a 120,000-square-foot, light-filled building in Greenwich, Connecticut, Fifth Street manages more than $6 billion altogether. Its vehicles include a $70 million long-short credit hedge fund, a private senior loan fund, and a $309 million collateralized loan obligation. Most of the firm’s assets, though, are in two publicly traded business development companies: Fifth Street Finance Corp. and Fifth Street Senior Floating Rate Corp.
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