June 6, 2018

Horizon Tech sets $300M investment pool

Farmington's Horizon Technology Finance Corp., a New York City liquidity investor and an unnamed insurer are pooling as much as $300 million to diversify Horizon's existing stakes in venture startup loans and other investments.

Horizon finance chief Daniel R. Trolio announced Tuesday its joint venture with Arena Investors L.P., called Horizon Secured Loan Fund I LLC (HSLF). Each is initially putting up $25 million, plus another $100 million in combined equity, to launch their joint fund. Horizon and Arena will jointly control the venture.

The unidentified insurer has committed an initial $100 million, and has the option to double that, officials said.

Horizon specializes in venture loans to startups in the life sciences, clean-tech and health-data sectors. In addition to loan interest and fees, Horizon borrowers typically repay the lender with stock, stock warrants or other equity.

"We believe that HSLF will enable us to diversify our investments and achieve attractive economics while maintaining a strong emphasis on credit quality," Trolio said.

To enhance their venture, Horizon and Arena said they have teamed with an unidentified insurer who will help originate suitable investments. Horizon did not immediately respond to a request for comment.

"An essential component of Arena's investment strategy is to joint venture with like-minded investors and industry experts with domain expertise within niche and nuanced asset classes. Horizon has constructed a top tier organization that has a demonstrated ability within venture lending," said Arena Managing Director Scott B. Gold.

Arena claims to seek debt investments in private, middle-market companies worldwide, in transactions ranging from $10 million to $50 million.

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