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Yield starved investors are not without hope, says Jim Grant, suggesting (the 9 min. mark) two...

Yield starved investors are not without hope, says Jim Grant, suggesting (the 9 min. mark) two BDCs - Ares Capital (ARCC) and Golub Capital (GBDC) - both of whom had very good credit experience even in the last brutal cycle. Also consider leveraged loan funds - yes, they invest in leveraged companies, but they have the senior-most claims, and the loans performed well even during 2007-09. Andrew Boral has a nice article describing a few.
Comments (4)
  • BlueOkie
    , contributor
    Comments (6470) | Send Message
     
    Senior most claims didn't work for GM investors after the gov't bailout.
    16 Dec 2012, 09:40 AM Reply Like
  • DougRk
    , contributor
    Comments (1619) | Send Message
     
    Indeed. Smart money will never, -never-, again trust seniors in any entity that even remotely might become political. The damage done to bk law and the bond market was incalculable.
    16 Dec 2012, 10:32 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9973) | Send Message
     
    But neither ARCC or GBDC are cheap relative to crisis level prices. How much could they fall if the financial crisis reasserts again?
    16 Dec 2012, 10:43 AM Reply Like
  • davidbdc
    , contributor
    Comments (3181) | Send Message
     
    I think that PSEC is a better value than ARCC and GBDC (though I admit I don't know much about GBDC). In addition to the yield PSEC has some capital gains ahead of it - IMO.
    16 Dec 2012, 03:41 PM Reply Like
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