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IPA Responds to WSJ Article on Non-Traded BDCs

March 23, 2016

WSJ Assertion: Investors are requesting redemptions at a record pace.

IPA RESPONSE: Non-traded BDCs are providing liquidity to investors, as designed by prospectus.

  • The $72 million in total redemptions over Q2 and Q3 of 2015 – which the WSJ characterized as an “accelerating move to the exits” – represents just 3% of the $22 billion in total BDC assets in the same time period.
  • Anticipating that some investors may need liquidity before a program goes full-cycle, most non-traded BDCs open redemptions to 2.5% of assets quarterly, or 10% of assets annually.
  • Regarding the “record pace” of redemptions that the WSJ refers to – or $47 million in third quarter 2015 repurchases – consider the following:

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Thomas E. Burns, III
July 29, 2015
February 22, 2016

I subscribe to Blue Vault to keep up with the sponsors and their wholesalers! The analysis keeps me up to date with the various portfolios and the way they are managed, including the differences between them.