However, I would like to see the results from the recent announcement from General Electric ( GE) to dismantle GE Capital that will have certain impacts to its Senior Secured Loan Program ("SSLP").Ĭurrently, the SSLP accounts for around 23% of the portfolio but a larger portion of the income to cover dividends. I consider ARCC to be one of the 'higher quality' BDCs and would potentially buy shares on a meaningful pullback. As discussed in my other " ARCC Articles," I sold most of my shares of ARCC to invest in BDCs with the ability to grow dividends and better pricing.
I have decided to start this series with Ares Capital ( NASDAQ: ARCC), similar to my " Dividend Coverage" series last year. This can be measured in many ways, but I will use the following for this series: Obviously, most of the management teams of these companies are very bright and capable, but the true measure should be how much value they have created for shareholders.
When it comes to investing in BDCs, assessing management is the most important and part of my 'qualitative' measures for valuing BDCs. This is a new series of articles, focused on comparing the historical results for business development companies ("BDCs") that have been public for at least six years, and looking forward to ongoing returns to shareholders.