Income Producing Alternatives:
Understanding Business Development Companies (BDCs)
Click here for the presentation slides
June 18, 2014
Time: 2:00-3:00 pm ET
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 over $30 billion and growing.
Governed by the Investment 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 attractive dividend yields that can reach double-digits -- a rare commodity these days well-suited for retirees and other income-seeking investors. 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)
With over $4 billion in AUM, Fifth Street Management LLC is a leading alternative asset manager focused on credit solutions and the investment adviser to two publicly-traded BDCs – Fifth Street Finance Corp. (FSC), one of the largest in the country by market capitalization, and Fifth Street Senior Floating Rate Corp. (FSFR). For more information, please visit fifthstreetfinance.com/fa.