Kennedy Lewis Investment Management and CalSTRS Announce Strategic Partnership in Non-Sponsored Senior Lending
The Partnership Includes $200 million of Seed Capital for Kennedy Lewis’ BDC, Kennedy Lewis Capital Company
NEW YORK, July 9, 2024 -- Kennedy Lewis Investment Management LLC ("Kennedy Lewis"), a leading alternative credit firm, and the California State Teachers' Retirement System (“CalSTRS”), have announced a strategic partnership focused on senior corporate lending for non-sponsored borrowers.
In addition to investments in Kennedy Lewis’ core lending strategy, CalSTRS will provide Kennedy Lewis with $200 million of seed capital to support the growth of Kennedy Lewis' Capital Company (“KLCC”), the firm’s non-exchange traded, perpetual-life Business Development Company (“BDC”). This partnership reflects CalSTRS and Kennedy Lewis’ shared confidence in the attractive total return and diversification benefits offered by non-sponsored direct lending and its appeal to a broad range of investors.
"We are thrilled to partner with CalSTRS, one of the world’s leading institutional investors, known for being at the forefront of the investment management industry," said David K. Chene and Darren L. Richman, Co-Founders and Co-Managing Partners of Kennedy Lewis. "There is currently an extremely compelling opportunity set that is complimentary to sponsor-backed lending mandates within the non-sponsored direct lending space. We see the potential to achieve diversification across industries and secure beneficial terms and pricing. We look forward to pursuing this investment opportunity on behalf of CalSTRS, its beneficiaries, and all investors in KLCC.”
Kennedy Lewis’ core lending strategy focuses on originating and investing in senior-secured, floating rate, loans to middle- and upper-middle market non-sponsored companies. The strategy benefits from Kennedy Lewis proprietary sourcing channels across a range of industries and sectors where the firm has specialized expertise, and its defensive investment approach that emphasizes long-term credit performance and principal protection.
About Kennedy Lewis
Kennedy Lewis is an alternative credit manager founded in 2017 by David K. Chene and Darren L. Richman with approximately $16 billion under management across private funds, a business development company, and collateralized loan obligations. The firm seeks to deliver attractive risk adjusted returns for clients by investing across the credit markets through its opportunistic credit, homebuilder finance, core lending and broadly syndicated loan strategies.
About CalSTRS
CalSTRS provides a secure retirement to more than 1 million members and beneficiaries whose CalSTRS-covered service is not eligible for Social Security participation. On average, members who retired in 2022–23 had 25 years of service and a monthly benefit of $5,141. Established in 1913, CalSTRS is the largest educator-only pension fund in the world with $337.9 billion in assets under management as of May 31, 2024. CalSTRS demonstrates its strong commitment to long-term sustainability principles in its annual Sustainability Report.
Forward Looking Statements
Certain information contained in this material constitutes “forward looking statements,” which can be identified by the use of forward looking terminology such as “may,” “will,” “expect,” “ intend,” “anticipate,” “estimate,” “believe,” “continue” or other similar words, or the negatives thereof. These may include our financial projections and estimates and their underlying assumptions, statements about plans, objectives and expectations with respect to future operations, and statements regarding future performance. Such forward‐looking statements are inherently uncertain and there are or may be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in KLCC’s prospectus and any such updated factors included in its periodic filings with the Securities and Exchange Commission (the “SEC”) which will be accessible on the SEC's website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in KLCC’s prospectus and other filings. Except as otherwise required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.
The contents of this material: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities of KLCC or any other product, (ii) offers can be made only by KLCC’s prospectus which is available upon request, (iii) do not and cannot replace the KLCC prospectus and is qualified in its entirety by the prospectus, and (iv) may not be relied upon in making an investment decision related to any investment. All potential investors in KLCC must read the prospectus and no person may invest without acknowledging receipt and complete review of the prospectus.
Contacts
For Kennedy Lewis:
Prosek Partners
Josh Clarkson
Disclaimers
This sales and advertising literature is neither an offer to sell nor a solicitation of an offer to buy securities. An offering is made only by a prospectus. This sales and advertising literature must be read in conjunction with the Prospectus in order to fully understand all of the implications and risks of the offering of securities to which the Prospectus relates. Please carefully read the Prospectus and consider Kennedy Lewis Capital Company’s investment objectives, risks, charges and expenses and other information described therein prior to making any investment decisions. A copy of the Prospectus must be made available to you in connection with any offering. No offering is made except by a prospectus filed with the Department of Law of the State of New York. Neither the U.S. Securities and Exchange Commission, the Attorney General of the State of New York nor any other state securities regulator has approved or disapproved our common stock, determined if the Prospectus is truthful or complete or passed on or endorsed the merits of the offering. Any representation to the contrary is a criminal offense.
Investing in Kennedy Lewis Capital Company’s Common Shares involves a high degree of risk. See the “Risk Factors” section of Kennedy Lewis Capital Company’s prospectus. Also consider the following:
Investment in the Company is suitable only for sophisticated investors and requires the financial ability and willingness to accept the high risks and lack of liquidity inherent in an
investment in the Company.
Investors may not have access to the money they invest for an extended period of time.
You should not expect to be able to sell your Common Shares, regardless of how we perform. Because you may not be able to sell your shares, you will be unable to reduce your exposure on any market downturn.
Our Common Shares are not currently listed on an exchange and given that we have no current intention of pursuing any such listing, it is unlikely that a secondary trading market will develop for our Common Shares. The purchase of our Common Shares is intended to be a long-term investment.
Distributions are not guaranteed, and if made, may be funded from sources other than cash flow from operations, including the sale of assets, borrowings, return of capital or offering proceeds. Although we generally expect to fund distributions from cash flow from operations, we have not established limits on the amounts we may pay from such sources.
Distributions may also be funded in significant part, directly or indirectly, from temporary waivers or expense reimbursements borne by the Advisor or its affiliates, that may be subject to reimbursement to the Advisor or its affiliates. The repayment of any amounts owed to our affiliates will reduce future distributions to which investors would otherwise be entitled.
We use and expect to continue to use leverage, which will magnify the potential for loss on amounts invested in us. See “Risk Factors - The Company Borrows Money, Which Magnifies the Potential for Gain or Loss on Amounts and May Increase the Risk of Investing With Us” section of Kennedy Lewis Capital Company's prospectus.
There are restrictions on shareholders.
There is a risk that investors may not receive distributions.
We have implemented a share repurchase program, but only a limited number of shares will be eligible for repurchase and repurchases will be subject to available liquidity and other significant restrictions.
You may pay a sales load of up to 3.50% and offering expenses of up to 0.04% on the amounts you invest. If you pay the maximum aggregate 3.54% for sales loads and offering expenses, you must experience a total return on your net investment of 3.67% in order to recover these expenses.
Securities offered through Realta Equities, Inc., Member of FINRA and SIPC. Realta Equities, Inc. and Kennedy Lewis are not affiliated.