BDCs and Their Fees
We’ve criticized buyout firms for their egregious fee-taking, but it seems that their BDC peers aren’t much better. In a move not unlike buyout firms earning returns on bankrupt companies, business development corporations that lend to small and mid-market companies can take fees on loans that ultimately produce a loss on their balance sheet. That includes large groups like Apollo Investment Corp. all the way down to smaller shops like PennantPark Investment Corp. But one firm is looking to change the paradigm is Golub Capital. The New York-based firm recently filed to bring one of its funds public as a BDC, raising $150 million under the ticker GBDC. Comparing the fee structure described in the vehicle’s N-2 filing to that of its peers, it appears the firm has one of the most favorable fee structures around.
