A Tough Year for Nontraded BDCs
November 24, 2017 | Barron’s
Sales of nontraded business development companies are headed for a decline for a third year in a row and are likely to have their worst year for equity raising since 2010, according to InvestmentNews.
The publication cites data from investment bank Robert A. Stanger & Co. Over the first three quarters of 2017, nontraded BDCs raised $624 million. That compares with a total of $1.5 billion for all of last year. Sales are also far from the $5.5 billion seen in 2014, when nontraded BDCs were at their zenith.
Nontraded BDCs are most often closed-end companies that buy the debt and equity of private companies, InvestmentNews notes. This type of product, which can offer high yields but can also come with hefty commissions, was first sold in 2009.
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