Why Externally Managed BDCs Are Quietly Robbing Shareholders
Externally managed Business Development Companies (BDCs) are reportedly underperforming compared to their internally managed counterparts. The article discusses how management fees contribute to this disparity, leading to lower price-to-net asset value (P/NAV) ratios. It also suggests that attempts to bridge this gap may not be successful.
- ▪Externally managed BDCs trade at lower P/NAV than internal peers.
- ▪Management fees are a significant factor driving the performance gap.
- ▪Convergence bets between different management styles may fail.
Opening excerpt (first ~120 words) tap to expand
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