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Category Archives Ares Capital

We take on the subject of BDC stock buybacks, touted in Barron's recently. We review the wide discrepancy between BDC managers enthusiasm for stock repurchases and reality. We end by diagnosing why the BDC sector needs a more viable and longer term solution than buybacks to its current depressed state. Plus, how we are positioned.

Ares Capital (ARCC) announced a new joint venture partner to replace the absconding GE Capital to continue making loans in the upper middle market. Investors and analysts seem comfortable with the news. We've dug a little deeper and are less convinced that ARCC is free and clear. We explain why in great detail. We are Short ARCC as discussed at the end of the article, but we accept this is a contrarian view.