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 4th Quarter 2013 issue has been released.
Per this issue:
Financial results released during the quarter indicate modest slippage on asset yields (with the aggregate effect asset yield for the group at 11.0%, compared to 11.2% the prior quarter). Inflows of investable funds through stock issuance and incremental new borrowings ($1.85 billion) outpaced net investment origination ($1.13 billion). Management teams will be anxious to put this money to work – it remains to be seen what the implications of this dry powder are for yields on new originations and dividend paying capacity. Ultimately, the health of the economy will determine whether loan demand from BDC customers will keep up with capital being supplied to BDCs by investors./blockquote>
You can download the issue in pdf format here.
For more information on the services Mercer Capital provides to business development companies, click here.