XAI Contributes to Financial Times FundFire Article on Innovations in BDC and CEF Structures

In a recently published FundFire article entitled “New SEC Filing Aims to Crack Open BDC Sales,” Tom Stabile highlights the latest developments in BDC and CEF structuring and the use of multiple share classes and other methods to broaden distribution of such products across various channels. To read the full article, please click here.

KKR and FS Investments have filed for SEC relief on multiple share classes for their non-listed BDCs to be marketed on different sales terms to different channels. Without the exemptions from the Investment Adviser’s Act of 1940, BDC and CEF managers can offer only one share class, limiting sales to smaller slices of the advisor market.

Kimberly Flynn, Managing Director at XA Investments contributed to the article. Flynn notes that winning the exemptions would improve the BDC’s sales prospects. XA Investments found another way to market its new non-listed credit CEF to different advisor markets without seeking multiple share class exemptive relief. The CEF starts out with a no-sales load offering targeting the RIA market first, then will have a 30-day sales window in the wirehouse channel, just prior to publicly listing the fund, which will pave the way into other brokerage channels.