$2.6 Billion Corporate Capital Trust II Launched by CNL and KKR

CNL Financial Group announced that the registration statement of Corporate Capital Trust II, a second non-traded business development company advised by CNL and KKR, has been declared effective by the Securities and Exchange Commission. Corporate Capital Trust II is anticipated to commence operations later this year.

The Corporate Capital Trust II offering seeks to raise approximately $2.6 billion via the sale of up to 275 million shares of common stock at $9.45 per share. The upfront sales load totals 4.75 percent (2 percent sales commission plus 2.75 percent dealer manager fees). Additionally, the offering will pay an annual trail commission, dubbed an “ongoing distribution and shareholder servicing fee,” of 1.25 percent of net asset value for the first four years of the offering. The trail commission is emerging as a popular structure in the face of FINRA Rule 15-02, which will require investor statements to reflect the impact of sales load beginning in April 2016.

The announcement comes on the heels of the fifth anniversary of the two firms’ partnership. CNL and KKR formed a relationship in the summer of 2010 and, in 2011, launched Corporate Capital Trust, one of the first non-traded BDCs, to invest in the debt of privately held companies. Corporate Capital Trust has grown to $3.7 billion in assets as of June 30, 2015.

“Both CNL and KKR have a deep history of bringing leadership and innovation to the market. Our combined expertise has made Corporate Capital Trust a truly unique opportunity for investors,” said James M. Seneff, Jr., founder and executive chairman of CNL. “Corporate Capital Trust was CNL’s first investment offering outside of real estate and we could not have asked for a better partner for this venture. We have enjoyed our relationship with KKR and are excited to launch Corporate Capital Trust II as we enter the next phase of this collaboration.”

Henry Kravis, co-chairman and co-CEO of KKR, stated: “CNL has proven to be an excellent partner, and we are looking forward to building on this relationship for many years to come. A growing number of investors are seeking alternatives and Corporate Capital Trust has allowed us to reach them in new and different ways.”