BDCs and Registered Funds

A proliferation of different fee levels and structures is evident throughout the alternative investment industry, and business development companies (BDCs) are no exception. For instance, management and incentive fees within the BDC space vary widely between issuers, with management fees ranging from as low as 1 percent to as high as 2 percent of gross assets. Throughout the industry, common drivers for revisiting existing fee structures include changing market norms and pressure from investors.

Click here to read this article in which partner John Mahon talks to The Hedge Fund Journal about new BDC fee structures and future fee trends.

An increasing number of private fund managers are turning to alternative products registered under the Investment Company Act of 1940 as a means of growing their assets under management and diversifying their product offerings and revenue streams.

Click here for¬†special counsel Pamela Poland Chen‘s discussion of how closed-ends funds with the look and feel of a hedge fund can allow managers to access a broader investor base and a diversified income stream.

A decision issued on Jan. 24, 2017, in the U.S. District Court for the Southern District of New York dismissed a complaint alleging the payment of excessive advisory and administration fees by Prospect Capital Corporation, a business development company regulated under the Investment Company Act of 1940.

Click here to read more about these developments.