Fifth Street Asset Management Inc’s (FSAM) Q3 2014 Earnings Call Transcript

Tia:

The next question comes from the line of Ken Warnington with JP Morgan. Please proceed.

Ken Warnington:

Hi, thanks again. A couple of questions.

Question: One on the hedge fund, can you update us on what year did the performance, just like in the product, how good the results are?

Answer: We’re not allowed to talk about that. Legal council is like waving me off but I think we talked about or at least I talked about on the remarks that we had very strong performance.

Question: Okay and I know that this is sort of cheating a little bit but I’ll ask it anyway; the unutilized lending capacity, can you give us what the capacity was maybe at the end of the third quarter for FSC and FSFR and say at comfortable leverage levels as opposed to the limits, you know based on you’ve got the JV equity, you’ve got the existing fund equity and I think you’ve closed on some of the borrowing. Based on all those, how much capacity was there at the end of Q3?

Answer: Looking at it as of that point in time, we had capacity to do for the fourth quarter something that we didn’t, in the middle of the range of what our average quarterly originations are and that of repayments. Look, if you look back historically at the range of our net originations, we had capacity to continue to do that for the fourth quarter.

Question: Okay, is that the range of fourth quarter’s or the range of all quarters? Since the fourth quarter is typically very strong.

Answer: I would point to the average across all quarters because you know, we weren’t able to raise additional capital in the fourth quarter so that provides something of a constraint for us to be on that highest end of that range. And also to sort of just clarify, the FSFR had far more capacities, I think I said it in my earlier comment, than FSG did as FSG  was already somewhat levered going into the quarter. FSFR, as you know, we still had to do quite a few leverage and we have a little bit to go.

Question:Okay and then lastly, again sorry on the questions, but on the tax rate, I think the tax rate was lower this quarter, I know it wasn’t actually a real quarter, but how should we think about how 3Q taxes influence our outlook for 4Q in 2015?

Answer: I think that the pro-forma tax rate as reflected there is kind of an accurate reflection on where the pro-forma tax rate should come out.

There are no further questions in queue at this time. I will now transfer the call back over to management.

Todd G. Owens:

Thank you very much for attending. We look forward to reporting to the next quarter.

Tia:

Ladies and gentlemen, thank you for your participation in today’s conference. That concludes the presentation. You may now disconnect.

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