Business Development Companies
Created by Congress in 1980 as an amendment to the Investment Company Act of 1940, Business Development Companies ("BDC") are publicly traded firms that invest like venture capital firms in small to middle market companies. Most BDCs are taxed as regulated investment companies (RIC) and pay little or no corporate income tax. RICs must pass through 90% of taxable income to their investors. Here are a list of some of the largest BDCs:
American Capital Strategies (ACAS)
American Capital Strategies (Nasdaq:ACAS), with $100 billion in assets under management, is a publicly traded private equity firm and global asset manager. American Capital, both directly and through its global asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products. American Capital and its affiliates invest from $10 million to $500 million per company in North America and €10 million to €100 million per company in Europe. Since its August 1997 IPO, American Capital and the funds it manages have invested approximately $30 billion in over 520 portfolio companies. Offers senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations.
Apollo Investment (AINV)
Apollo Investment Corporation (NASDAQ: AINV) is a leading provider of subordinated debt and equity capital to middle-market companies. Apollo Investment Corporation is managed by Apollo Investment Management. Their portfolio is composed primarily of investments in subordinated debt, sometimes referred to as mezzanine debt, and senior secured loans of private middle-market companies that, in the case of senior secured loans, generally are not broadly syndicated and whose aggregate tranche size is typically less than $300 million. From time to time their portfolio also includes equity interests such as common stock, preferred stock, warrants or options.
Ares Capital (ARCC)
Ares Capital is one of the largest BDC's with approximately $5.8 billion of total assets. The senior partners for Ares Capital's investment adviser possess an average of more than 23 years of relevant experience. Ares and General Electric Capital Corporation and GE Global Sponsor Finance LLC (collectively,"GE") also co-invest through an unconsolidated vehicle, the Senior Secured Loan Fund LLC, which operates using the name "Senior Secured Loan Program" (the "SSLP"). The Company and GE, through the SSLP, co-invest in first lien senior secured loans of middle market companies.
BlackRock Kelso Capital (BKCC)
BlackRock Kelso Capital provides middle-market companies with flexible financing solutions, including senior and junior secured, unsecured and subordinated debt securities and loans, and equity securities. Their strategy is to provide capital to meet clients’ current and future needs across this spectrum, creating long-term partnerships with growing middle-market companies. BlackRock Kelso Capital was formed in 2005 by management, BlackRock, Inc. and principals of Kelso & Company. BlackRock Kelso Capital has capital resources exceeding $1 billion.
Equus Total Return (EQS)
Equus attempts to maximize the return to stockholders in the form of current investment income and long-term capital gains by investing in the debt and equity securities of companies with a total enterprise value of between $15.0 million and $75.0 million, although they will engage in transactions with smaller or larger investee companies. Their income-producing investments consist principally of debt securities including subordinate debt, debt convertible into common or preferred stock, or debt combined with warrants and common and preferred stock.
Fidus Investment Corp (FDUS)
Founded in 2007, Fidus offers mezzanine debt and equity financing to firms with revenues from $10 million to $150 million.
Fidus Investment Corporation (NASDAQ: FDUS) invests mezzanine debt and equity capital primarily in lower middle market companies based in the United States.
Fifth Street Finance (FSC)
Fifth Street Finance Corp. is a specialty finance company that lends to and invests in small and mid-sized companies in connection with an investment by private equity sponsors. They focus on generating current income from debt investments and capital appreciation from equity investments. They strive to achieve this objective by capitalizing on our existing relationships with private equity sponsors and developing new partnerships.
Full Circle Capital (FULL)
Full Circle Capital Corporation (Full Circle Capital) is a non-diversified closed-end management investment company. Full Circle Capital’s investment objective is to generate both current income and capital appreciation through debt and equity investments. The Company invests primarily in asset-based senior secured loans, mezzanine loans and equity securities issued by smaller and lower middle-market companies that operate in a diverse range of industries, with a focus on the media, communications and business services industries. Its investments would range in size from $3 million to $10 million.
Gladstone Capital (GLAD)
Gladstone Capital is a specialty finance company that invests in debt securities consisting primarily of senior term loans, senior subordinated loans and junior subordinated loans in small and medium sized companies. Loan amounts vary from $5 Million to $20 million and can be repaid over 5 years.
Related company: Gladstone Investment
Golub Capital (GBDC)
For our Shareholders, our investment objective is to generate current income and capital appreciation by investing in senior secured, unitranche, second lien, and mezzanine loans of, and warrants and minority equity securities in U.S. middle market companies. We seek to generate strong risk-adjusted net returns by assembling a diversified portfolio of investments across a broad range of industries and private equity investors. We primarily target U.S. middle market companies controlled by private equity investors that require capital for growth, acquisitions, recapitalizations, refinancings, and leveraged buyouts.
In 2012, Golub Capital received an ACG NY Champion's award for "Senior Lender Firm of the Year." Golub Capital has been ranked a "Top 3" Traditional Middle Market Bookrunner every year from 2008 through 1Q 2012 by Thomson Reuters LPC for senior secured loans of up to $100 million for leveraged buyouts (based on number of deals completed).
Hercules Technology Growth Capital (HTGC)
Hercules Technology Growth Capital (NYSE: HTGC) is a leading specialty finance company addressing the financing needs of entrepreneurial, venture capital and private equity-backed companies by providing senior secured loans and select equity growth capital. They focus on specific sectors, including technology, cleantech, life science and healthcare, and special-opportunity lower middle market.
Horizon Technology (HRZN)
Horizon Technology Finance Corporation is a business development company that provides secured loans to development-stage companies backed by established venture capital and private equity firms within the technology, life science, healthcare information and services, and clean-tech industries. The investment objective of Horizon Technology Finance is to maximize total risk-adjusted returns by generating current income from a portfolio of directly originated secured loans as well as capital appreciation from warrants to purchase the equity of portfolio companies.
KKR Financial Holdings (KFN)
KKR Financial Holdings, Inc., is a publicly traded specialty finance company. It seeks to leverage the proprietary resources of its manager, KKR Financial Advisors LLC, a wholly owned subsidiary of KKR Asset Management, to generate both current income and capital appreciation. The company’s majority-owned subsidiaries finance and invest in financial assets, including below-investment-grade corporate debt, marketable equity securities, and private equity by a unit of private equity superstar Kohlberg Kravis Roberts & Co., KKR Financial invests in secured and unsecured corporate loans, including mezzanine loans, high-yield corporate bonds, asset-backed securities, and debt and equity securities.
KCAP Capital (KCAP)
Formerly Kohlberg Capital, KCAP Capital originates, structures and invests in senior secured term loans, mezzanine debt and selected equity securities primarily in privately held middle market companies. In addition to the company's middle market investments, their wholly owned portfolio company, Katonah Debt Advisors and its controlled affiliates (collectively "Katonah Debt Advisors") manage collateralized loan obligation funds ("CLO Funds") that invest in broadly syndicated loans, high-yield bonds and other corporate credit instruments.
Main Street Capital (MAIN)
Main Street is a principal investment firm that provides long-term debt and equity capital to lower middle market companies and debt capital to middle market companies. Main Street’s portfolio investments are typically made to support management buyouts, recapitalizations, growth financings, refinancings and acquisitions of companies that operate in diverse industry sectors. Main Street seeks to partner with entrepreneurs, business owners and management teams and generally provides "one-stop" financing alternatives within its lower middle market portfolio. Main Street’s lower middle market companies generally have annual revenues between $10 million and $150 million. Main Street’s middle market debt investments are made in businesses that are generally larger in size than its lower middle market portfolio companies.
Medley Capital (MCC)
Medley Capital Corporation, formerly Medley Capital BDC LLC, is a non-diversified, closed-end management investment company. The Company’s objective is to deliver a targeted total return to investors on average of 15% over time. Its objective is to generate current income and capital appreciation by lending directly to privately held middle market companies. Its portfolio consists of secured loans, and, to a lesser extent, subordinate loans and equity positions in situations where it is also a secured lender. Its private debt transactions are structured to combine elements of both equity and fixed-income investments. The Company focuses on providing customized financing solutions in the form of secured loans to corporate and asset-based borrowers, and utilizes structures, such as sale leaseback transactions, direct asset purchases or other hybrid structures. MCC Advisors LLC is the investment advisor of the Company.
MVC Capital (MVC)
MVC provides long-term equity and debt investment capital to fund growth, acquisitions and recapitalizations of small and middle-market companies in a variety of industries primarily located in the U.S. MVC's investments can take the form of common and preferred stock (control and non-control investments) and warrants or rights to acquire equity interests; senior and subordinated loans; or convertible securities. MVC serves as the lead investor for transactions, as well as a co-investor in companies along with other private equity sponsors.
New Mountain Finance (NMFC)
New Mountain Finance Corporation invests primarily in the debt of companies that are high quality, defensive growth companies, which are defined as generally exhibiting the following characteristics: (i) sustainable secular growth drivers, (ii) high barriers to competitive entry, (iii) high free cash flow after capital expenditure and working capital needs, (iv) high returns on assets and (v) niche market dominance. Their investments to typically have maturities of between five and ten years and generally range in size between $10 million and $50 million.
NGP Capital Resources Company (NGPC)
NGP Capital Resources Company (NASDAQ: NGPC) is a Business Development Company focused on providing debt and equity capital to the energy and natural resources sector as well as various sectors within the broader middle market, including niche manufacturing, value-added distribution, business services, healthcare, consumer services and select other sectors. NGPC provides a wide range of customized financing structures including senior and subordinated debt, convertible debt, preferred equity and project equity.
Oxford Lane Capital (OXLC)
Oxford Lane Capital Corp. (Oxford Lane Capital) is a non-diversified, closed-end management investment company. Oxford Lane Capital seeks to achieve its investment objective by investing primarily in senior, secured loans made to companies whose debt is unrated or is rated below investment grade (Senior Loans), with an emphasis on current income. Oxford Lane Capital has initiated its investment objective by purchasing in the secondary market portions of equity and junior debt tranches of collateralized loan obligation (CLO) vehicles. Oxford Lane Capital’s investment activities are managed by Oxford Lane Management.
PennantPark Investment (PNNT)
PennantPark Investment Corporation (Nasdaq: PNNT) is an externally managed investment company that seeks to generate both current income and capital appreciation through debt and equity investments. They invest primarily in U.S. middle-market private companies in the form of senior secured loans, mezzanine debt and equity investments. The companies in which we invest are typically highly leveraged, often as a result of leveraged buy-outs or other recapitalization transactions. They invest in senior secured loans, mezzanine loans and other investments between $10 million and $50 million each. Related company: PennantPark Floating Rate Capital (PFLT).
Prospect Capital (PSEC)
PSEC invests primarily in first-lien and second-lien senior loans and mezzanine debt, which in some cases include an equity component. We provide capital to middle-market companies and private equity financial sponsors for refinancings, leveraged buyouts, acquisitions, recapitalizations, later-stage growth investments, and capital expenditures. PSEC’s portfolio is diversified across a wide variety of industries, including manufacturing, industrials, energy, business services, financial services, food, healthcare, and media, as well as many other sectors. PSEC also invests in the equity and subordinated debt tranches of collateralized loan obligations (CLOs).
Solar Capital (SLRC)
Solar Capital Ltd. (Solar) is a closed-end, externally managed, non-diversified management investment company. The Company invests primarily in the United States middle market companies. Solar’s investment objective is to generate both current income and capital appreciation through debt and equity investments. It invests primarily in leveraged middle market companies in the form of senior secured loans, mezzanine loans and equity securities. The Company may also invest in public companies that are thinly traded. Solar is focused primarily on the direct origination of investments through portfolio companies or their financial sponsors. In addition, the Company focuses to invest a portion of its portfolio in other types of investments, which it refers to as opportunistic investments. Solar is managed by Solar Capital Partners, LLC (Solar Capital Partners).
Solar Senior Capital (SUNS)
Solar Senior Capital invests primarily in leveraged, middle-market companies in the form of senior secured loans, including first lien, unitranche and second lien debt instruments. Solar Senior Capital’s investment objective is to maximize current income consistent with the preservation of capital. Solar Senior Capital does this through applying private equity style investing to credit.
TICC Capital (TICC)
Formerly Technology Investment Capital, TICC Capital Corp. (NASDAQ: TICC) is a business development company primarily engaged in the business of providing capital to technology-related companies. TICC concentrates its investments in companies having annual revenues of less than $200 million and/or a market capitalization or enterprise value of less than $300 million, with a focus on businesses in the following sectors: computer software and hardware, networking systems, semiconductors, semiconductor capital equipment, diversified technology, medical device technology, information technology infrastructure or services, Internet, telecommunications and telecommunications equipment and media.
TCP Capital (TCPC)
TCP Capital's primary investment focus is the origination of and investment in debt securities of performing middle-market companies, building on TCP's established track record of origination of and participation in the original syndication of approximately $3.6 billion of debt securities to 55 companies since 1999. Their investments generally range from $10 million to $35 million per company. Related Company: Tennenbaum Capital Partners, LLC.
THL Credit (TCRD)
THL Credit’s junior debt group provides junior capital and equity to middle-market companies. Investments are made through THL Credit, Inc. (NASDAQ: TCRD), a publicly traded business development company (BDC), and THL Credit Greenway Fund LLC (“Greenway”), a separately managed account and portfolio company of THL Credit, Inc. that invests alongside THL Credit, Inc. THL Credit’s senior loan strategies team invests in the non-investment grade credit market, particularly in syndicated bank loans and high yield bonds. Investments are managed by THL Credit Senior Loan Strategies LLC and made through collateralized loan obligations (CLOs), separate accounts and co-mingled funds. Typical junior investments range from $10 – $50 million in companies that have annual revenues between $25 million and $500 million, or with annual EBITDA exceeding $5 million.
Tortoise Capital Resources (TTO)
Tortoise Capital Resources is an energy infrastructure asset financing company that provides capital to pipeline, storage and power transmission operators. TTO’s portfolio includes companies and real assets with long-term, stable cash flows, limited commodity price sensitivity, and growth opportunities.
Triangle Capital (TCAP)
Triangle Capital Corporation is a publicly traded, internally managed business development company (“BDC”). They offer a wide variety of investment structures, with a primary focus on mezzanine financing with equity components, for lower middle market companies located throughout the United States. Typical investments are $5 to $25 million for leveraged buyouts, management buyouts, recapitalizations, growth finance, ESOPs, and acquisition finance. Triangle offers a variety of financing structures to private equity partners, including subordinated debt with warrants, first and second lien loans, one-stop and uni-tranche structures, and equity co-investments.
Master Limited Partnership Association f/k/a the National Association of Publicly Traded Partnerships
The Master Limited Partnership Association f/k/a National Association of Publicly Traded Partnerships, formerly the Coalition of Publicly Traded Partnerships, is a trade association representing the publicly traded limited partnerships (PTPs) that are commonly known as master limited partnerships (MLPs), and those who work with them. The Association is an outgrowth of an informal lobbying organization which was formed in 1983. Both the current Association and its predecessor have been highly successful in representing the interests of MLPs in Washington D.C. and the states.