The second article of our putative BDC Activist turns to the struggle between Fifth Street Asset Management (FSAM) and its unhappy biggest shareholder about who should be in charge of Fifth Street Senior Floating Rate Corp (FSFR), the publicly traded BDC which the former manages. Brings out many of the themes the BDC Activist is focused on.
We are testing out the format of a new series or newsletter tentatively called The BDC Activist, which will examine and de-construct the conflicts of interest between Business Development Companies managers and their shareholders. We start very randomly with insights drawn from reading Apollo Investment’s (AINV) latest SEC filings.
We dig into Alcentra Capital’s (ABDC) recent SEC filings and find some new data. We use the opportunity to provide a fuller picture of how these developments affect both common stock and debt holders of the Company. SCM-the parent of the BDC Reporter-is Long both the shares and the Notes and we explain how and why.
Started writing this article during the BDC meltdown and finished as we rally. We review the huge drop in BDC Sector prices over the last 2 years-including 13 new lows reached- and the very good reasons why. However, we find us ourselves optimistic that a buyer at these levels might have the opportunity to make out-sized returns. We explain why, but hedge ourselves as always.
In a new feature, we bring to your attention select Business Development Company SEC filings, and analyze the impact and import of the disclosures tucked away in the Investor Relations section. We start with a number of items at American Capital (ACAS), where insider sales activity is high. However, a major new shareholder has arrived on the scene…
American Capital (ACAS) completes the first phase of an activist initiated “strategic review” and decides to put itself on the auction block. We describe two ways the BDC Reporter is surprised by what ACAS is doing, and how we’ve maneuvered as an investor in recent weeks and today.
Capitala Finance (CPTA) has just announced the waiver of a portion of its Incentive Fee on the expectation that non-performing energy credits might reduce recurring earnings. We hail the kind offer, but also take a deeper look at the Company’s under-performing assets. There is Good News and Bad News here.
First article of the New Year ! We start with TICC Capital’s repayment of its Citibank Revolver, and turn to estimating how the Company’s balance sheet might be evolving. We end by trying to reconcile TICC’s stated new business strategy and the need to meet BDC regulatory requirements. Will the Company double down on CLOs and change its format ?
The BDC Reporter ends the year with a quick review of how BDC common stocks have performed in a Bad Year for most every asset class out there. There’s no sugar coating here, and no rose-colored view of 2016. We close with a brief insight into how we are positioning our own investments in BDC-land.
Fifth Street Floating Rate (FSFR) has just been informed that one of its shareholders is not happy and wants to have two of its principals elected to the Board and get shareholders to fire the company’s existing investment adviser, a subsidiary of Fifth Street Asset Management (FSAM). Mr Market cheers, but the BDC Reporter is not yet convinced, and says why.
ISS-an independent proxy firm-flip flopped and recommended TICC Capital (TICC) shareholders vote FOR making Benefit Street Partners the new Investment Adviser. We provide details of the change of heart, and handicap the outcome of the Special Shareholder’s vote on December 22.
As you may have heard, the Federal Reserve raised short term rates on Wednesday. Here is a brief review of the impact on the Business Development Company sector, and similar companies, two days in. There are winners and losers early on. Longer term determining who will gain and who will lose is much more complex.
The BDC Reporter takes a snapshot of the BDC sector just before the Fed announcement, and two years into its price meltdown. We discuss both some long term trends and illustrate with a few individual case studies. We end with a few not very startling conclusions and a prediction. We also let readers know how we are deploying capital as an investor in BDC-land.
After sparring with a Federal judge and contender NexPoint Advisors, TICC Capital (TICC) is back and has re-scheduled the Special Shareholder’s meeting that will decide if Benefit Street Partners (BSP) will be handed the investment advisory keys, and the current manager a big-if still undisclosed- cheque. We bring the narrative at TICC up to date. First of a two parter.
Link to a new article we published on Seeking Alpha which digs deep into Fifth Street Finance’s (FSC) 10-K for the year ended September 30, 2015. The focus of this first article is on financial issues such as income, earnings, leverage and asset valuation.
American Capital (ACAS) announces a “strategic review” even as the company prepares to spin off the bulk of its assets into a new Business Development Company in a nod to pressure from its major shareholder, activist hedge fund Elliott Management. Will this “unlock shareholder value” or go nowhere ?
A reader of the BDC Reporter is an investor in BDC Baby Bonds, and had some questions about our view of their creditworthiness, especially in the light of new BDC legislation wending through Congress. A back and forth Q&A ensued which we are tidying and republishing for our readers.
Under-performing KCAP Financial (KCAP) was approached by its 3rd largest shareholder in October, requesting a stock buy-back or a sale of the Company to restore shareholder value. We review the activist shareholder’s views, and provide an update on what has happened to date. Part of a series.
The struggle over who will manage TICC Capital rages on, while 3 new BDC companies have attracted the attention of “activist” shareholders. We briefly summarize who the new targets are, and who is doing the targeting and we provide an update on what is happening at TICC. First in a series.
The latest chapter in the TICC Capital (TICC) saga. The current External Manager changes the Proxy for shareholders at a judge’s request. We break down the principal revelations. However, we continue to believe TICC Management is going to get its way with shareholders, and BSP will be anointed as Investment Adviser.