Don't own a position but like their ability to match assets and liabilities. I love their focus on expense control. Compare Ares' vehicle, ACRE. More than 2x the expenses relative to each dollar of book value and each dollar of gross interest income. Good job management! (Never thought I would write that about an Apollo vehicle lol).
Well, I didn't buy any MCC until the dividend was cut to 30 cents. They have their problems for sure but are already at a 25% discount to NAV . . . that sets the bar pretty low. As for the valuation of the asset manager business, when the dividend was 12ml it was valued at x . . . now the dividend is 5 ml can it still be worth x?
although I think given the volume the end of the sell off is near.
1) who knows how much expense they will have in Q1 and Q2 for the restatement work
2) I assume they will be sued by soon by shareholders . . . always some expense and concern associated with that; there is also a risk of round 2 with the SEC (though unlikely)
3) it seems to me they are still going to need to write down the asset manager . . . you can't use a dividend discount model to value, it seems to me, cut the dividend almost in half, and retain the same valuation
4) (off topic) I think the overall BDC bounceback is nearing an end
5) once they are convinced they are going to stay below NAV permanently (prob tough for management to accept this) their inclination will be to cut the dividend to match NII . . . I would guess maybe 17 cents . . . and retain capital
6) penalty box BDCs are pushing 25% discounts to NAV . . . that would be closer to $5
At $5 unless the story changes significantly I would be a buyer. One thing this whole experience shows me is that internal management is not a silver bullet.