Skip to content

Capitala, Medley & New Mountain Finance Offer BDC Opportunities: John Cole Scott sits down with Gregg Greeneberg at The Street

2014-1030-TheStreet-BDCsCapitala Finance has more equity exposure than most other debt-based business development companies so it offers higher potential upside, said John Cole Scott, Portfolio Manager for Closed-End Fund Advisors.

Scott added that Capitala is still a relatively new fund so it is still attracting new investors.

He is also bullish on Medley Capital, saying this highly liquid BDC has swung to a discount after selling at a premium for years, providing a nice entry point for a quality portfolio.

Finally, Scott is positive on New Mountain Finance, saying a recent secondary offering provides investors with a solid entry point.  Note: BDCs in this video: CPTA, MCC, NMFC

Click [Here] to Watch Video: http://www.thestreet.com/video/12935105/capitala-medley-new-mountain-finance-offer-bdc-opportunities.html

Closed-End Fund Advisors: Third Quarter 2014 CEF/BDC Review and Outlook Summary and WEBINAR REPLAY Links

webinar-newFor those that were not able to attend our Quarterly Research Call on October 9, 2014, we have the replay link and slides below. This quarter we covered The Closed-End Fund Universe, both traditional CEFs and BDCs.

We are excited to now offer coverage of Business Development Company (BDC) CEFs alongside our coverage of Traditional CEFs.

Link to Webinar replay slides:
http://www.cefadvisors.com/Download/2014-1009-CEFUpdate-Outlook.pdf

Webinar Replay:
http://www.cefadvisors.com/Download/2014-1009-CEFUpdate-Outlook.wmv

Overview Traditional CEFs: According to our CEF Universe Service dated September 30, 2014, during the second quarter of 2014 the traditional closed-end fund universe ended with 581 funds totaling $266.5B in Total Net Assets, which reflects a net asset growth of about +5.9% year-to-date. There were 229 total Equity funds and 352 total Bond funds.  The average Discount to NAV is -7.9%, the average Market Price Yield is 7.1%; 7.9% for Equity funds, 7.4% for Taxable Bond funds, and about 6% for Municipal Bond funds.  In general, discounts have widened about -1 ¾% during this quarter and a -0.8% below the quarter’s average Discount per fund. US and Non-US Equity funds had generally flat discount trends, though the widening was more prevalent in the other CEF sectors. This makes many CEF groupings and individual funds very attractive for investors willing to take a slightly contrarian view of the current market environment. Read more…

Scott Letter: Closed-End Fund Report Interview with Tekla Capital Management’s Dr. Daniel Omstead. They Have Three Healthcare Funds (HQH, HQL, THQ) – [Free Sign-Up Required]

Omstead-Tekla-Blog TeaserOctober 6, 2014, Richmond, VA.—  Closed-End Fund Advisors is pleased to announce an in-depth interview in The Scott Letter: Closed-End Fund Report with Dr. Daniel R. Omstead. He is President and CEO of Tekla Capital Management, LLC
(“Tekla”). He is also President of H&Q Lifesciences Investors and H&Q Healthcare Investors.

We found the interview to be a timely update on how investors could gain access to Biotech and Healthcare stocks (public and private) as well as their new fund (THQ) focused on a more income based healthcare strategy. We also discuss how the funds are being positioned in the current economic and interest rate environment. If you are not already a subscriber to The Scott Letter, a subscription is free on our website www.CEFadvisors.com.

Once you sign-up, you will receive the interview as well as gain access to our firm’s periodic email updates on our services, CEF markets and various articles, videos, webinars and live CEF conferences or meetings we host or are otherwise involved with in some way.

Free Scott Letter Registration: www.cefadvisors.com/scottletter.html.

BDC Boot Camp: An Introduction to Business Development Companies

privateequityOur firm has been zeroing in on BDCs for most of 2014; adding them to our CEF Universe data and news / SEC filing coverage, our Monthly Best Ideas List, launching a managed BDC account in September or partnering with a UIT provider for a BDC UIT for November. The similarities between traditional CEFs and BDCs are what initially drew us to the structure.  However, it is important to understand both the similarities and differences in order to decide how and/or when to invest in a BDC.  We hope this article will help prepare you to be able to do this.  We will begin by discussing the origin of BDCs. This article is a companion to the video we recently released on BDC funds. www.vimeo.com/johncolescott/bdc-boot-camp

A Business Development Company is a closed-end fund that is publically listed, with exposure to private equity investments.  BDCs were created by Congress in 1980 as an amendment to the 40 Act and are required to own 70%+ of US small to midsized businesses; they can make both debt and equity investments in private or thinly traded companies as long as they are under $250M market capitalization for the 70% exposure. Read more…

Balancing CEF Data vs. Portfolio Data when Selecting a Closed-End Fund

balancing-stonesWe are often asked how we decide to purchase shares in a CEF and at what price point we are comfortable buying into a fund or where we would exit a portfolio position. This reminds us that we find many CEF investors only focus their effort on either the CEF-based data or the fund’s fundamental data when deciding to buy a CEF. A closed-end fund is at its basic sense equity exposure to an active manager’s results. We think you should like the pricing and the investment to own the shares no matter who is the portfolio manager.

We would suggest investors first decide that they want to be in the sector that the fund is in and become comfortable that the manager has the experience to do the job well for investors. We find that the most successful CEF investors balance these two areas well over time and through various market cycles. As they are a large part of the CEF universe, we will use Municipal Bond CEFs as the example when helping to explain these concepts in this article.  The process can be applied to equity, taxable bond or BDCs funds in a similar fashion.

Fundamental Fund Data:

This is the data that is part of the fund’s disclosures on a typically quarterly basis. It includes allocations for sectors and countries as well as the type of securities; for example, a fund could own both bonds and common stocks in varying percentages. We would also include the fund’s net asset value (NAV) performance on a total return basis.  It is important to be able to judge a manager vs. his/her peers and an index over time, as well as how volatile the returns have been historically.  Read more…

Webinar Replay & Slides: Can CEFs Help Build a 6%+ Tax-Free Yielding Portfolio?*

TaxesToday’s live webinar on how a portfolio using closed-end funds to gain municipal bond exposure has been archived with the slides and replay below: 
Please click here for the Presentation Slides in PDF format: [Here]

Full Link: http://www.cefadvisors.com/Download/CEFA-MuniMarketOverview-2014-09-09.pdf

To download and view the webinar replay click [Here]
Full Link: http://www.cefadvisors.com/Download/CEFA-MuniMarketOverview-2014-09-09.wmv

Article Referenced during session on CEFs in a rising rates environemnt: http://cefadvisors.wordpress.com/2014/08/18/closed-end-funds-rising-rates-and-the-impact-on-performance-and-yield/

CEFA’s Universe Data Definitions: 
https://cefadvisors.com/Download/CEFUDataDefinitions.pdf

CEFA launched a Municipal Bond Portfolio Model earlier this year and offers three options for tax-free investors looking for professional management:. 1. National Muni Focus 2. New York Muni Focus and 3. California Muni Focus. This session focused on the National model. If you live in California or New York please call or email us to learn more. sales@cefadvisors.com or toll-free (800) 356-3508 / (804) 288-2482.

CEFA also offers a Monthly CEF “Best Ideas List”, Weekly “CEF Universe” data service and a “Daily CEF News Alert” service for investors or investment professionals that want to access the firm’s resources without hiring us as an investment manager. We have free trials for the news and data services and offer prorated refunds on any services offered by the firm. 

Scott Letter: Closed-End Fund Report Interview with Eaton Vance’s Walter Row, Portfolio Manager of Their Tax Managed Dividend Equity Income Fund (ETY) – [Free Sign-Up Required]

 

ETY-SL Blog Photo

September 8, 2014, Richmond, VA.—  Closed-End Fund Advisors is pleased to announce an in-depth interview in The Scott Letter: Closed-End Fund Report with Walter Row, portfolio manager at Eaton Vance on their Tax Managed Dividend Equity Income Fund (ETY). We found the interview to be a timely update on how investors could gain US Equity / S&P 500 exposure at a discount to NAV with tax sensitive dividends and portfolio management with strategies like dividend rolling and tax-loss harvesting to increase the after tax return of the fund for many shareholders who may use in a taxable account. CEFA cannot give tax advice. We also discuss how the fund is being positioned in the current economic and interest rate environment. If you are not already a subscriber to The Scott Letter, a subscription is free on our website www.CEFadvisors.com.

Once you sign-up, you will receive the interview as well as gain access to our firm’s periodic email updates on our services, CEF markets and various articles, videos, webinars and live CEF conferences or meetings we host or are otherwise involved with in some way.  

Free Scott Letter Registration: www.cefadvisors.com/scottletter.html

 

Follow

Get every new post delivered to your Inbox.

Join 131 other followers