New ACAS Fund Launched: American Capital Infrastructure
It would be nice if someone knew what they were talking about... first, coal hates natural gas because utility plants that convert back and forth on price have stayed with nat gas longer than normal... next, coal hates EPA because Obama wants to do in coal so that nat gas becomes the transition fuel.... next, wind energy is a joke.... sure utilities can use it effectively if they use it immediately... there is no method to store excess wind energy effectively and it does not transmit down transmission lines as efficiently as other energy forms.
Gee, Malon has discovered what PSEC has been doing for several years now in the energy arena. GE, Blackstone, Farallon, Kohlberg Kravitz, TPG... and many other major players are all in.
The same CFO that thought investments in structured products was the right way to go for ACAS because they could gin up the dividend income is all in on this? I wouldn't trust Malon's judgement because ACAS is way too late to the game and the other players have better mgmt teams than some has-been from AES. One thing to always remember about a utility CEO... he hasn't lived in the real world of profit for such a long time..... his profits were guaranteed by regulation so this guy is hardly the main go to guy when setting up a new division.
But what choice does ACAS have because the best and brightest are not going to ACAS where there is no dividend income in an investment arena where investors demand income. ACAS noi suggests an $0.80 annual dividend so even with the discount to nav ACAS is overvalued to the sector. Then when you consider over $3.00 of nav is retained dividends that would have been required to be paid out you do not have the true discount to nav when comparing to other BDCs with higher income/growth potential.
ACAS is late to the game and competing against superior investors with superior management teams and lower cost of debt/equity. Translation, they can accept the investments that would be unacceptable to the best of breed.