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All right -- they are calling this yields final -- a new market is brewing that is offering big payouts for income thirsty investors like you -- -- with yields yields starting at 8% going into double digits here to tells about these investments.
And exactly how to play them is -- Tannenbaum our friend from fifth street.
Finance the CEO great to see you again when I was -- -- per -- about the perfect instrument at a time when when folks out there are just dying for some kind of give particularly sabres who were who think it's a stock market might be a little too hard right -- This is some -- -- called business development companies -- -- tell us exactly what they are so PVCs were actually created back in nineteen -- to help small and midsize businesses.
Today they help all sorts of businesses by lending to the business.
And collecting interest.
-- get out to shareholders okay these are businesses in other words that because of new banking rules -- -- have a tough time getting it through normal banking channels right so they go into the investment market in order to get capital.
That's right -- the banks pull back there's an alternative managers start stepping up.
The BDCs are filling the gap where banks are not.
And there are a lot of BBC's or 35 or forty BDCs out there some with some different investment strategies.
But and we should say by the way you guys have one right so -- you're selling your book here where the fifth largest BC -- got a 1000001 market cap.
-- right what where you have 8% 9% double digits to Mason dividends you also have greater -- tell us about the risks that's right -- invested in -- private companies that we would they were to get a reading barely get a B rating for example from S&P on average at least our portfolio of ninety companies.
But when you aggregate all of that -- together.
Any manager correctly S&P rates -- triple B minus and Fitch rates as triple B minus and there are five or six investment grade rated.
BDC of course when we as we saw what is -- -- you can put a lot of stuff together and it could still add up to job.
That's true but what happened sub prime is leverage and leverage can get anyone into trouble the good news about BBC's is there's not more than one to one leverage.
It even through that 2008 crisis by the way when we went public in 2008.
But after that 2000 crisis nobody -- -- lent money to BC has ever lost money.
Wow OK now what kind of companies are we talking about specific ways is that he's hamburger joints and some bigger -- matter what I like hamburger joints Burger King franchise systems actually is will Lewis whatever -- we got -- and made that.
At -- amount of money but we can ask anything from fitness centers in in Nevada and it would -- fitness is more -- -- gas distributors.
We can best end.
Of the -- -- which is translation software.
These are companies that we shall we do accompanies really over ten million dollars of earnings 2550 million dollars of earnings are as well as as some people are getting nervous about this market you -- David Stockman warming morning that there's going to be some kind of Armageddon.
If there is a question of how difficult it is to get out of your best how tough is it to get your principal back.
If you start getting nervous that's a great question so we'll watch that liquidity percentage of the portfolio pretty closely.
Twenty to 30% of our portfolio we could sell within a day.
I'm not necessarily apartment in 97 or 98 but if we need liquidity quickly -- big enough today with a billion -- of assets.
That we can get liquidity for their shareholders also demand the -- right we've -- over a million shares a day.
An investor needs to sell they sell and -- it was a -- Fifth Street Finance has it but fair and balanced or some other organizations -- park.
There's an ET FB IZD either a lot of different ways to play this so young that active that -- funds just didn't ETF may be weeks ago.
Of the entire industry that's a great week even diversify further if you don't wanna buy one BDC can diversify further by by Hispanic.
GAAP terrific that were all about giving people options this is another option in which their best when ten about partly Shia and that's what's about thank you very much great stuff thank you went.
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