FSK - Ares Capital: Why It's The Only Large Externally Managed BDC We Like
Summary
In terms of the yield demanded by the market, very large, externally managed BDCs are among the highest. Ares (ARCC) is an exception with an attractive but not distressed-level 9.3% yield.
Ares manages to combine the talent and scale associated with being the largest BDC with much of the efficiency and portfolio quality of a smaller, internally managed company.
For instance, Ares obtained medium-term fixed rate debt at only 3.50% and has among if not the lowest leverage costs in the industry.
Distribution coverage improvement and a successful reshuffling of its portfolio have resulted