Business development companies are an important and growing source of funding for middle market companies. Along with private equity and other investment funds, BDCs provide billions of dollars of investment capital to private companies in every segment of the economy. Mercer Capital produces a quarterly newsletter that tracks the financial and stock market performance of the public BDCs. The 3rd Quarter 2013 issue has been released.
Per this issue:
Excluding realized and unrealized portfolio gains and losses, financial results released during the quarter improved modestly from the prior quarter, primarily as a result of marginally higher effective asset yields (11.2% compared to 10.7% in the prior quarter). Including both realized and unrealized components, the analyzed BDCs reported a net loss on portfolio investments of $70.2 million, or -0.2% of total assets. Sequentially, the pace of investment activity recovered in the second quarter, increasing to $5.0 billion from $3.5 billion in the first quarter. As some BDCs begin reaching down the capital structure of portfolio companies to garner yield, investors will likely be keeping a close eye on credit performance in coming quarters.
You can download the issue in pdf format here.
For more information on the services Mercer Capital provides to business development companies, click here.