You should know that basically all these BDCs (PSEC, HTGC, PNNT, ARCC, AINV, BKCC, TCAP, MVC, TICC, ACAS, ALD, GLAD, KED) are set up to have high fees, so if you are going to sell on the basis of fees, you should probably consider selling any BDC holding you might have. This is not unreasonable, but I wouldn't single out FSC. BDCs are all essentially run with hedge-fund like incentive structures, or perhaps more accurately private-equity like incentive structures. With BDCs, you are getting investments in private equity.
I would completely agree the fees are too high, but I would also point out that a company like FSC is originating loans to private companies, which requires more due diligence work and infrastructure then a mutual fund manager buying Intel or IBM, so you are going to have live with higher fees.
MC |
