67 WALL STREET, New York - June 24, 2014 - The Wall Street Transcript has just published its Business Development Companies Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: BDC Risk/Reward Profile - Business Development Companies Historical Overview - Internally and Externally Managed BDCs - BDC Dividend Growth - BDC Returns - Strong BDC Fundamentals - BDC and Bank Differences - Competitive Outlook for BDCs
Companies include: Monroe Capital Corporation (MRCC) and many more.
In the following excerpt from the Business Development Companies Report, the Chief Investment Officer and CFO of Monroe Capital Corporation (MRCC) discusses company strategy and the outlook for this vital industry:
TWST: For the BDC, what are the primary characteristics you look for when you are making an investment? What makes something an attractive investment for you?
Mr. Peck: We look for companies that have stable cash flows, and we like to lend to companies that we think have true enterprise value. There are asset-based lenders and cash flow lenders in the market, but we mostly consider ourselves to be enterprise value lenders. As such, we look to make sure that we are not too deep in any one company in terms of our loan as a percentage of total enterprise value. If we think a company has enterprise value of seven times EBITDA, we would like to be anywhere from 60% to 70% max of that enterprise value, so maybe four times to 4.5 times EBITDA. That's really what we look for.
We look for stable businesses, stable cash flows. Company growth is good, but what we like to see is companies that have some stability in their cash flow that is predictable year in, year out. This is what really, at the end of the day, drives true enterprise value. It can be a challenge in the lower part of middle market. There are great companies out there that have generated really nice cash flows, but the consistency and the enterprise value are sometimes more difficult to find in the lower end of the middle market.
TWST: What about within sectors? Do you focus on any specific sectors, or do you evaluate each investment completely on a case-by-case basis?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.