The Anatomy of a Closed-End Fund
When looking for ways to invest internationally, the amount of choices can be daunting. Closed-end funds can be an efficient way to gain exposure to international regions.
“Home bias” can sizably limit an investor’s portfolio by reducing its ability to capture additional sources of return.
As of June 2015, Ares Capital’s (ARCC) stock declined by ~5% over the past 12 months. The company paid a dividend of $0.38 per share—at par with the year before.
Ares Capital’s (ARCC) net DE ratio improved to 0.63x as of March 31, 2015. The improvement was mainly due to net debt repayments during the first quarter.
Ares Capital (ARCC) has consistently increased its exposure in second lien senior secured debt. It formed 26% of its total portfolio in 1Q15.
Ares Capital (ARCC) has built a successful partnership with GE Capital’s US Sponsor Finance business over the last five and a half years.
Ares Capital’s (ARCC) portfolio totaled $8.5 billion at fair value. Its total assets stood at $8.9 billion. It reduced the size of its investment portfolio.
Currently, Ares Capital (ARCC) has a diversified $8.5 billion portfolio. The company made a total of $500 million in new investment commitments in 1Q15.
As of June 2015, Ares Capital (ARCC) stock has declined by ~5% over the last year. The company’s market capitalization has fallen to $5.16 billion.
Prospect Capital’s ~13% dividend yield is the highest of its investment management peers. Its recent stock troubles are due to declining yields.
Prospect Capital has expanded its balance sheet with assets now totaling $6.76 billion, up from $6.48 billion as of June 30, 2014.
Prospect Capital has made multiple investments in the real estate arena with its private REITs. Largely, it’s focused on multi-family stabilized yield acquisitions with attractive ten-year financing.
The company is building its portfolio in a diversified way with minimal industry concentration. The largest investment in any particular sector forms a maximum of 10.2% of its total portfolio.
Prospect Capital has managed to generate above-market yields through disciplined credit selection and a diverse origination approach.
Prospect Capital plans partial or complete spin-offs of its non-business development companies to raise capital for future expansion.
Prospect Capital works with financial sponsors and management teams to identify investments with historical cash flow, asset collateral, or contracted pro forma cash flow.