RC, what are your thoughts on the Russell thing, if you are still hanging around? My sense was that it would only impact the sector market cap leaders but it seems to be digging deeper into the smaller caps.
Also, are you still following KCAP? How is that asset manager acquisition working out.
P.S. You definitely helped change my approach to BDCs, thanks for that. I look alot more closely at management track record and access to capital in determining what fair value is with regard to NAV. Thanks!
Hi RC! Good to hear from you -- I don't post much anymore.
I only own a few shares at this point -- sold most of what I have in January when it got back to $14 so my total loss today is about the cost of a burger and fries.
In late January I completed liquidation of all my BDC holdings. I own alot of the HTGC baby bonds and a smaller slug of PSEC and SLRC baby bonds. I think the loan market is VERY overheated and IRRs on loans made in 2013 and 2014 will be VERY poor across the sector. This may not show up for awhile though.
HRZN is a true trainwreck. I expect that they are piling into life sciences at the very top. Plus, I just DESPISE management's promotional style. Believe it or not, they opened the call by contratulating themselves on their excellent NAV performance . . . while quietly flagging the fact that they will no longer be covering even their reduced dividend going foward.
Given where their cost structure is and their track record, even putting aside my concerns about the life sciences venture loan market this is a 5-7% ROE business and deserves to trade at a 25-35% discount to NAV and then only if we see the board replaced.
Possibly their worst quarter ever. I am thanking the stars I didn't add to my small position. Has their underwriting recently gotten really bad or were they lying about their pre-IPO track record? One of those statements must be true. Can't wait for the conference call to watch them spin this.
I have held a small position in HRZN since forever and was sniffing around today with the mini pullback here but I came to my senses and stopped. They are still below scale if you look at the percentage of gross interest income they spend on expenses.
That said, I suspect the mini pullback is mostly due to Russell selling or shorting ahead of the anticipation.