ORLANDO-At a time when private companies are struggling to find capital, two firms have partnered to offer a viable solution—and a new opportunity for investors. CNL Financial has aligned with Kohlberg Kravis Roberts to form a nontraded business development company called Corporate Capital Trust.
Officially launched on April 4, the new entity is working to raise capital by issuing common stock over two years through a continuous public offering via CNL Securities Corp. Corporate Capital Trust will invest primarily in the debt of privately owned U.S. companies with a focus on originated transactions sourced through the networks of its advisor, CNL Fund Advisors Company, and subadvisor, KKR Asset Management, LLC, both of which are registered as investment advisers with the SEC.
“Historically, CNL has taken a contrarian approach,” Mark Petersen, a senior vice president at CNL Fund Advisors, tells GlobeSt.com. “We look for markets that are underserved with capital. We saw this space as very opportunistic for us as we want to be able to provide alternative investment products to our clients.”
CNL has more than 37 years of experience sponsoring and managing diverse investment programs. Since inception, CNL or its affiliates have formed or acquired companies with more than $24 billion in assets. With 34 years of experience, KKR has invested in more than 185 transactions valued at more than $435 billion. KKR has deep expertise in analyzing the operations, performance and financial condition of companies and an ability to structure transactions at all levels of a company’s capital structure.
“The retail investing market—individual investors—are constantly looking for better ways to create income for their portfolios,” Petersen says. “This product in particular, investing in senior secured and senior subordinated private companies, is an opportunity to create a nice income off of a investment portfolio.”
CNL Financial’s biggest challenge might be its reputation for real estate. Petersen says his group will work to educate clients on this new asset class, and in fact is already seeing strong interest for the product as the partnership begins building out its selling syndicate.
“In real estate, we’ve been able to partner with some significant leading investment groups,” Petersen says. “That’s what we intend to continue to do—match our talent and expertise and our focus on underserved marketplaces with leading institutions in those spaces.”
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