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BREATHING

BDCs:
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BREATHING

It’s early Saturday morning here is California and the BDC Reporter’s first chance to draw breath in days. What a week we’ve had !  Asking our readers to register so that we can know more about you and vice versa, and launching our Premium subscription service here as well as on Seeking Alpha a day later with identical content and pricing. Thanks to our tech gurus (including independent WordPress specialist Caleb Land whose contact information we’ve got at hand if anybody ever needs first rate help with a website) we managed to navigate most of our technical challenges. Nonetheless, apologies to those few readers who had problems signing in.  As always just write to us at nmarshi.bdcreporter@gmail.com and we’ll get right to fixing any issues. The BDC Reporter is aghast at the possibility that anyone would not get to read our output, if even for a few minutes.

Looking back over the week (which has felt like a year) we recognize – with the benefit of hindsight – that we could have done a better job communicating about a few issues. So – with your indulgence – here are a few items:

TRYING TO BE CLEAR

Point One:  We should have made more clear what the Premium subscription is and who it’s intended for. We’re a professional investor and we spend most hours of every day (like Warren Buffet but minus the billions) reading, analyzing and cogitating about BDC press releases, filings of every type and watching the screen. We have millions of our capital and that of family, friends and third party investors at risk which concentrates the mind and causes us to want to have as complete a picture of what we’re investing in before we push the proverbial computer key.  We’ve also learned the hard way that what you don’t know in BDC investing (all investing ?) can hurt you. Which is why – over the years – we’ve gotten further and further “into the weeds” where our process is concerned, and have needed to write out our conclusions just to keep track of what we’ve learned. There are 45 public BDCs to track. On average 5-10 BDCs  report on some development every day. Plus, we’re working on tracking what’s happening at 500 or more under-performing BDC portfolio companies in order not to be too surprised when the quarterly reports come out. You do the math.

WE ARE NOT ALONE

We know there are numerous other investors of every stripe out there doing much the same thing every day. Individual investors with their Excel and reading lists; hedge fund managers and analysts;  money managers and fellow Registered Investment Advisors, not to mention the managers of the BDCs themselves, always intrigued by what the “other guy” might be up to and what might be being said about them. We also know from the correspondence we’ve received over the years that independent accountants, regulators, journalists and some highly specialized academics have a greater than average interest in what’s happening in BDC-land. Our BDC News Of The Day is aimed at that group of individuals and institutions who are already making their own mind up about whether to Buy Or Sell XYZ BDC but want to make sure they have their ducks in a row; or are looking for new ideas in a sector which now has close to 100 public securities to choose from.  We thought of calling our Premium subscription our Pro Service, but we didn’t want anyone to draw the wrong conclusion from that nomenclature. As plainly as possible the subscription service is intended for readers – who like us – spend an above average amount of time involved with the BDC sector AND who are interested in having someone else’s assessment of what it all means.

THIS IS US

We don’t think of the BDC News Of The Day as an Investment Newsletter, or of the BDC Reporter as a stock picker. That’s what we do in our other capacity as a Registered Investment Advisor. We like to believe we’re BDC analysts, digging deeper and wider than most other authors and publications have the time or inclination to do, and offering up the results for readers to draw their own conclusions.  If you’re in that relatively small group of individuals, we encourage you to give the Premium subscription a go.

THE BEST WAY

Point Two: The very best way – something else we didn’t make clear enough – is to sign up for the 14 Day Free Trial. Yes, we do request that you give us your credit card details (our plug-in makes that a requirement) but you can cancel at any time in that two week period and never be charged. Even if you do subscribe – if only because you forgot to cancel which we’ve been guilty of – you can still cancel at any time and only pay for the month involved.

We also know that some readers have an almost religious aversion to paying for anything online.  We would only say that you get what you (don’t) pay for and the BDC News Of The Day is not one of many (free) options to choose from. As far as we know, nobody else is so obsessed as to read, analyze and write in-depth about multiple BDC stories a day. For the 6-8 hours we spend preparing and posting  asking a reader to spend $40 a month seems a fair trade.

EVERYBODY ELSE

However, we are aware there are many readers of the BDC Reporter whose interest in the subject is more modest/infrequent, or who fall in the “religious aversion” category.  We understand that it must be galling to come to the website and see so many posts with the Premium lock on and receive a sales pitch rather than an easy read. Point Three: We’d like to make clear that we’re going to continue to publish “free” articles with you in mind.  The form and content will be less the “hot off the presses” style which the BDC News Of The Day favors, but a more traditional form. Like an Investment Newsletter. We currently have a couple of series we’ll be adding to, both of which are the natural results of all that daily work we do.  The first is rating the “dividend sustainability” of the many BDCs we track, and share our view of whether that apparently rock solid distribution you’re receiving is likely to continue in the next 12 months.  By our count, 16 of the 45 BDCs we track have cut their pay-outs in the past couple of years. Going forward, even though the market is pricing most BDCs as if distributions will remain unchanged, the BDC Reporter’s endless analysis suggests as many as 20 funds may be cutting again in the 12 months ahead. Our first article was about Garrison Capital (GARS) and we’ve just added another about MVC Capital (MVC), given that it’s 10-Q just came out.  We’re committed to updating these assessments as new information comes out, which we’ve already done with GARS.  We’ll also be telling our readers in another series about which BDC securities we’ve been buying, and which we’ve been deliberately avoiding, and why. Of course, the why is as important as the what. Plus, you’ll continue to hear more from the BDC Credit Reporter as we complete our systematic coverage of every under-performing company in every BDC’s portfolio. We hope to be able to offer up – initially – a weekly summary of all the credit highlights and lowlights we’ve found. (Subscribers,though, get to hear right away if there’s anything market moving involved. Fair is fair).

WHY WE WRITE

We don’t want to be disingenuous. These “free” articles take time and effort which could otherwise be spent on catching up on House Of Cards.  We are offering them up here (and on Seeking Alpha) either as a beta test for a future Premium subscription service, or as “marketing materials” for any of you -individual or institutional – who might be interested in our BDC-focused investment management capabilities. Yes, we are Registered Investment Advisors (third reference today-sorry) when we’re not at the keyboard and are seeking out more Accredited Investors for whom to invest in BDC common stocks and Baby Bonds or in our leveraged Fund, which invests mostly in Baby Bonds alone. The BDC Reporter’s articles  are a calling card or introduction to What We Think, which may or may not be a great way to get our word out, but there you are. Readers neither interested in our premium subscriptions or investing with us get the benefit of our writing thanks to those who are interested or might be.

We hope that makes things a little clearer. With all that said, time to head back to reading, writing and posting. Thanks for reading.

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