Fidante’s latest report investigates the opportunities BGLF offers for investors seeking exposure to floating rate fixed income investments
- Blackstone/GSO Loan Financing (‘BGLF’)* is the only listed investment company on the London Stock Exchange that invests in European and US CLOs, via the originator, Blackstone/GSO Corporate Funding (‘BGCF’). The exposures to European CLOs comply with EU risk retention rules. The company is advised by an experienced manager, GSO Capital Partners, part of The Blackstone Group (‘Blackstone’), in a low-cost management structure with ongoing charges of just 0.4%. On top of that, the interests of the company’s managers are aligned with investors, as Blackstone holds a substantial proportion of the company’s shares.
- The turnaround in NAV performance from the middle of 2018 can be illustrated by the fact that the rolling 12-month return has recovered to 13.4%, having reached a low of -0.4% at the end of May 2018. This is above its previous high of 13.3% at the end of December 2016. The improvement in the NAV performance has fed through to the price of the EUR-quoted ordinary shares, which have recovered rapidly from their c. 15% discount in January. However, they remain at a discount of just more than 8% at present, which is wide compared to the levels at which the shares have traded for more than half of the Company’s life.
- We believe that BGLF remains an attractive opportunity for investors seeking exposure to floating rate fixed income investments, which have performed better this year than in 2018. The potential for further NAV growth and the possible closing of the discount from the current levels suggest that further decent performance for shareholders may be within reach. On top of that, the current dividend yield is an attractive 12.2%.
To read the full report click here.
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Past performance is not indicative of future results.
* Current corporate client of Fidante Capital.