FSIC listing aims to bring institutions into BDCs


So far so good a few days after FS Investment Corporation (FSIC +0.6%) - the largest non-traded REIT - went public, immediately becoming the 4th largest company in the publicly traded BDC sector.

BDCs are generally a retail product - the typical one targets 90% retail investors, 10% institutional - but, along with also recently gone-public TPG Specialty Lending (TSLX -1.3%), FSIC "begins to create some comfort with institutional investors," says Raymond James' Robert Dodd, noting FSIC backers Blackstone and Franklin Square Capital Partners. The TPG listing, according to sources, had 85% institutional participation.

The pressure from 60K individual investors owning FSIC could weigh on the shares, says Ladenburg Thalmann's Mickey Schleien, but offsetting that is a tender offer by the company for up to $250M of stock.

ETFs: BDCL, BDCS, BIZD

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