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AR Capital BDCs Look to Co-Invest

AR Capital sponsored non-traded business development companies (BDCs) Business Development Corporation of America (BDCA), Business Development Corporation of America II (BDCA II), and BDCA Venture, Inc. (BDCV) recently announced that the Securities and Exchange Commission (SEC) issued a “notice” that it intends to permit the three BDCs to co-invest together.

“We are extremely pleased with this transformative event for BDCA, BDCA II and BDCV and their shareholders,” commented Peter M. Budko, Chairman and Chief Executive Officer of BDCA and BDCA II and an investment committee member for BDCV’s investment adviser.

The three BDCs originally filed an application on October 2, 2014 with the SEC requesting exemptive relief that would also include future affiliated BDCs and closed-end funds for co-investments.

Budko added, “The granting of this permission by the SEC will allow each of our BDCs to leverage off of the size and scale of our overall platform through co-investments in attractive transactions regardless of size.”

The SEC’s Notice states that an order granting the relief will be issued unless the Commission requests a hearing. If the SEC does not receive any requests for hearing by June 8, 2015, AR Capital’s BDCs expect the exemptive order to be issued shortly thereafter, as soon as June 9, 2015.

“Co-investments among our managed BDCs will allow us to greatly expand and diversify deal flow across our platform further improving the value proposition for all of our shareholders,” added Robert K. Grunewald, President and Chief Investment Officer of BDCA and an investment committee member for BDCV’s investment adviser.