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Are your clients tired of searching for yield in today’s low interest rate environment? The answer may lie in Business Development Companies, or BDCs – an income producing alternative asset class that has generally flown under investors’ radars – until now.
BDCs were created by Congress in 1980 to help stimulate lending in the U.S. and enable public investors to invest in private, growing businesses. Today, the industry is a powerful force in middle market lending with a market capitalization of ~$35 billion and growing.
Governed by the Investment Company Act of 1940, BDCs are pass-through entities, similar to REITs, that can bypass corporate income taxes as long as they distribute at least 90% of taxable annual net income as dividends to shareholders. BDCs are known for their dividend yields that can reach double-digits — a rare commodity these days well-suited for retirees and other income-seeking investors. In fact, the industry is currently trading at a discount, below net asset value (NAV), allowing for an attractive buying opportunity.
However, not all BDCs are the same or offer the same quality of investments. In fact, BDCs can adopt very different approaches, depending on each management’s philosophy. Register now for our live webinar to learn more about this emerging asset class and what to look for when evaluating these alternatives. Selectivity counts – and certain BDCs can allow clients to receive:
- Attractive, recurring dividends
- Access to risk-averse portfolios of private, middle market credits
- Diversification across many industries
- Floating rate exposure (helping to position for rising interest rates)
|Richard Petrocelli, CPA
Managing Director, Chief Financial Officer
Fifth Street Finance Corp.
Fifth Street Senior Floating Rate Corp.
|James F. Velgot
Chief Marketing Officer
Fifth Street Asset Management
|» PRESENTERS FULL BIOS|
NOTE: The webinar will be made available for replay after the live broadcast.
*Participants can submit questions prior to or during the event through the special feature on the event page or by emailing Capital Link at firstname.lastname@example.org
|TUESDAY, FEBRUARY 24, 2015 – DEUTSCHE BANK|