The selloff in BDCs is a buying opportunity, writes BDC reporter, noting the opportunity today to invest in a basket of BDCs (using BDCS as a proxy) at an 11% higher yield than just three months ago. The sector is yielding 43% more than high yield bonds (HYG) and nearly double floating rate loans (BKLN).
The higher yield, of course, reflects market concern distributions are set to fall (and BKCC and MCGC cut in Q1), but for the sector as a whole, distributions have been fairly stable over the last three years. Further, a number of players are under-leveraged or in growth phase, and occasionally have realized gains which are paid out as special distributions.
With the private-equity business in high cotton, Ares Management (ARES) hits the public markets with an 11.36M common unit offering, raising about $216M. The firm - whose portfolio includes Ares Capital (ARCC) and Ares Commercial Real Estate (ACRE) - is headed by Tony Ressler, an alumnus of Drexel Burnham and Apollo Global, where he worked alongside brother-in-law Leon Black.
Amid high times for private-equity, Ares Management is prepping the largest IPO of an alternative asset manager since Carlyle Group went public two years ago, reports Bloomberg. Based in L.A., the firm has $74B in AUM. Its CEO Tony Ressler is an alumnus of Drexel Burnham and Apollo Global where he worked alongside Leon Black (his brother-in-law).
Among Ares' portfolio is Ares Capital (ARCC) and Ares Commercial Real Estate (ACRE).
Ares Commercial Real Estate (ACRE +0.4%) originated six new loans in December totaling $339M in commitments and $258M of initial funding. About 60% of loans closed in December were for multifamily properties, with the remainder secured by office and industrial properties. All pay floating rate.
For the year, ACRE originated or co-originated 22 new commitments totaling $875M. The principal lending portfolio as of Dec. 31 is $1.05B in outstanding principal.
Co-CEO Todd Schuster: "We have made great progress in repositioning the ACRE Capital platform during our first full quarter of owning the business ... Although many of these accomplishments have not yet translated into our origination activity, important developments ... should enhance the business going forward."
Commercial mortgage REITs draw the attention of JPMorgan (see mREITs earlier) after a 14% sector decline in Q2. "We do not feel the sell-off is warranted on the basis of fundamentals." Ares Commercial's (ACRE -0.9%) price target is cut to $15.50 from $17.50, but is reiterated an Overweight. Apollo Commerical (ARI +0.1%) is maintained a Neutral and $16.50. Blackstone Mortgage (BXMT +0.8%) is initiated Overweight with $28.50 target.
Ares Commercial Real Estate (ACRE) announces an 18M share public offering the funds from which will go towards investments, debt repayment, the funding of existing loans, and general corporate purposes. Underwriters will have an option on up to 2.7M additional shares. Shares -3.95% AH. (PR)
Ares Commercial Real Estate Corporation (ACRE) declares $0.25/share quarterly dividend, in line with previous. Forward yield 5.91%. For shareholders of record June 28. Payable July 18. Ex-div date June 26. (PR)
Ares Commercial Real Estate Corporation (ACRE) declares $0.25/share quarterly dividend, in line with previous. Forward yield 5.84%. For shareholders of record Apr. 08. Payable Apr. 18. Ex-div date Apr. 04. (PR)
Ares Commercial Real Estate Corp is a specialty finance company, engaged in originating, investing and managing middle-market commercial real estate loans and other commercial real estate, or 'CRE,' related investments.