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: CIFC Corp. (CIFC) and many more.
In the following excerpt from the Business Development Companies Report, the Co-President and CFO of CIFC Corp. (CIFC) discuss company strategy and the outlook for this vital industry:
TWST: You mentioned fundamentals a couple of times. When you're looking at an investment, what are the important criteria that you weigh?
Mr. Wriedt: We are talking mainly about idiosyncratic credit risk, and so we want to understand the company's business, the industry it competes in, and specifically, we want to be able to understand how the company has performed over prior credit cycles. We do a lot of bottom-up fundamental credit work and have a very large credit infrastructure. We are focused on the private debt market, meaning we use private side information and financial projections. We purposely limit ourselves to private market information so that we can benefit from this "information edge."
TWST: What does the optimal investment look like for you?
Mr. Wriedt: The optimal investment is one that performs as we have forecasted. We obviously build our own financial models. We take into account what management tells us, but we model out every investment that we do internally. The ideal investment is one that is on plan or ahead of plan. We invest in performing credit. We don't believe that at this point in the cycle there is a lot of value in stressed/distressed credit.
Now sadly, not every investment plays out as expected. When it doesn't, we want to make sure that we have the structural protections, such as collateral and - when possible - covenants to get the company to come to the table so as to be able to work with the borrowers to address a covenant violation before the value cushion that we enjoy as a senior secured lender is eroded. A lot of the terms in the agreements that we insist on are really there in order to make sure that when the company does struggle, we get a seat at the table at a point when we can protect our investment.
TWST: Are there certain areas where you prefer to invest or is it a company-by-company play?
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.