The SEC’s decision in May to rescind the Boulder No-Action letter, allowing a closed-end fund to opt into a state control share statute without risking an enforcement action, could have a chilling effect on activism, and could face litigation for violating the Investment Company Act.
Many industries and sectors have been affected by the pandemic but despite how the current situation has so far changed the industry, the investment outlook is still positive.
Many asset classes offered today through interval funds have historically only been available through private LP structures and have generally not been accessible to retail investors.
BDCs with $4 billion or more in investments are weathering the impacts of the COVID-19 pandemic better than those that are targeting lower and middle market businesses.
With the US presidential election next month, the ongoing impact of the coronavirus pandemic and the question of whether the economy is still in a recession or in a recovery, it can be tough for managers in the closed-end fund (CEF) space to navigate that uncertainty while preserving capital.
Goldman Sachs has added interval funds to its growing offerings of retail alternative investments. During a keynote address at AICA’s Summer Summit on August 13th, Collin Bell, Managing Director and Global Head of Client Portfolio Management for Fundamental Equity within Goldman Sachs Asset Management, said Goldman has been involved in managing money in the form of traditional ‘40 Act funds and separately managed accounts for decades, but entered the interval fund space in May with the acquisition of a real estate interval fund.
While closed-end funds (CEFs) have traditionally been perpetual offerings, more CEFS have term offerings that allow investors to liquidate at net asset value and minimize premium discounts.
The BDC industry will evolve toward favoring the largest players who can make use of their scale to both address more attractive parts of the market and leverage their cost bases.
As traditional fixed-income portfolios and allocations are becoming a thing of the past, individual investors are starting looking at alternative fixed income solutions such as closed-end funds.
Although indiscriminate volatility has caused valuations to decline significantly since March, managers have been able to take advantage of lower prices to cheaply buy some company equities.
The need to differentiate from the competition is essential as the competitive BDC landscape tightens up, with more lenders bidding on the same deals and many BDCs trading below net asset value.
Following the lockdowns and onset of impacts of the coronavirus, when the stock markets went into turmoil, many business development companies (BDCs) took a step back to avoid the worst of the effects.
In today's low-interest-rate environment, principal perseveration a key fundamental present in bond strategies and managers must find yield without taking on too much undo risk.
There has been an ongoing trend of new issuances in taxable municipal closed-end funds (CEFs), particularly from institutional and foreign investors as yields have been higher than other debt products.
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