The Rabid Capitalist

Professor Glenn A. Okun

The Rabid Capitalist: The Big Point is a summary of a detailed note available to paid subscribers.

Well-managed business development companies (“BDC”) can avoid the trap plaguing private asset classes of excess capital overwhelming the investment opportunity. Elite BDCs’ strict underwriting standards will protect portfolios from the pressure to deploy capital recklessly. Some journalists have argued that the BDCs’ use of payment-in-kind (“PIK”) provisions, a cashless alternative to interest, will threaten their performance. The Rabid Capitalist expects that we have reached the peak in the use of PIK terms by high quality BDCs.

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