Deep Dive Into BDC's: What's the Real Story on Business Development Corps?
Part 4 of 6 in our Wealth Management Excellence Series. If you would like to attend the entire series at a discounted rate, click here.
As the landscape of non-traded credit opportunities has continued to grow, Business Development Companies (BDCs) have evolved into an asset class increasingly held by institutional and retail investors. BDCs were created in 1980 by Congress to encourage the flow of capital to private U.S. businesses, and have grown significantly over the past decade as an increasing amount of capital issued to small and mid-sized companies has shifted outside of the banking system. The majority of BDCs predominately originate and hold middle market corporate loans, which are typically floating-rate, senior secured assets, although some also have unsecured loans and equity exposure in their portfolios. BDCs, like REITs and other investment companies, are required to distribute at least 90% of taxable income as distributions, which makes these vehicles compelling income products for investors. Please join us as we explore the structures of BDCs (both public and private), asses the quality of the manager and the portfolios of various BDC vehicles, and weigh in on the pros and cons of investing in this asset class.
Andrew Kerai, CFA | Andrew Kerai joined RiverNorth in 2015 and serves as Portfolio Manager and Senior Credit Strategist. Andrew works with the firm's marketplace lending investment team in analyzing credit performance and portfolio positioning within the strategy. He is responsible for conducting research across credit markets, including the analysis of factors impacting both corporate and consumer credit.
Prior to joining RiverNorth, Andrew was Lead Portfolio Manager of an actively managed open-end mutual fund which invested in the equity securities of publicly-traded credit-focused investment funds, including business development companies (BDCs). Andrew was also an equity research analyst covering consumer and commercial lenders, credit card issuers, middle market commercial lenders, debt recovery companies and business development companies. He began his investment career as a portfolio analyst within high yield bonds and leveraged loans at Prudential Investments.
Andrew graduated Summa Cum Laude from American University with a dual major in international finance and accounting. He is a CFA Charterholder. Back To Top ^^
Steve Nesbitt | Steve Nesbitt is Chief Executive Officer of Cliffwater LLC and overseas all investment research as the firm's Cheif Investment Officer. Prior to forming CLiffwater in 2004, Steve led the Consulting division at Wilshire Associates and also started and built its asset management business using a 'manager of manager' investment approach, including private equity and hedge fun-of-fund portfolios. Steve started his career at Wells Fargo Investment Advisors, an early pioneer in index funds, where he developed and managed index funds and oversaw asset allocation.
Steve is recognized for his investment research. His articles have appeared in the Financial Analysts Journal, the Journal of Portfolio Management, and the Journal of Applied Corportate Finance on issues convering performance fees, currency hedging, gauging private equity performance, and corporate governance. His "firsts" include creating a "smart" index fund (1979); measuring the benefits of corporate governance and coning the term "CalPERS Effect" (1994); designing and implementing an institutional perfomance fee structure (1987); creating State Pension Surveys on Funding (1991) and Performance (2012); and measuring the private-to-liquid alternatives performance discount (2013).
Steve is best known for his research on Asset Allocation and Portfolio Construction, covering over 30 years of annual long term expected returns and risk across assets classes. At Cliffwater, he has led research on the components of hedge fund return and risk and proper construction of a portfolio of hedge funds.Back To Top ^^
Jason Breaux | Jason Breaux is a Managing Director of Crescent Capital Group LP focusing on private credit. He is also the CEO of Cresset Capital BDC, Inc. Prior to joining the team in 2000, he worked at Robertson Stephens where he served in the Mergers and Acquisitions Group. Prior to that, he worked in the Corporate Finance Division of Salomon Brothers specializing in capital raising assignments.
Mr. Breaux received an MBA from the Darden School of Business at the University of Virginia and an AB from Georgetown University. Back To Top ^^
Carey Davidson | Carey Davidson is Managing Director and Head of Capital Markets of Monroe Capital. In March of 2019, Monroe Capital announced that Davidson was elected Partner. Prior to her current position, Davidson held various roles at different firms, including Vice President at The Carlyle Group, Senior Vice President at Churchill Financial, and Assistant Vice President at GE Antares Capital.
Davidson was a Mergers & Acquisitions “Most Influential Women in Mid-Market M&A” recipient in 2018. She received a B.A. at the University of Wisconsin and an M.B.A. at the University of Chicago Booth School of Business. Back To Top ^^
|As a participant in the CFA Institute Approved-Provider Program, the CFA Society of Los Angeles has determined that this program qualifies for 1.5 credit hours. If you are a CFA Institute member, CE credit for your participation in this program will be automatically recorded in your CE Diary.|
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