November 1, 2016 Comments (0) Blog

Pennant Park BDC Investment Losses

(Last Updated On: November 23, 2016)

Are you concerned about your investment losses with PennantPark BDC? If so, The White Law Group may be able to help by filing a FINRA Dispute resolution claim against the broker who sold you the investment.

PennantPark Investment Corporation (Nasdaq: PNNT) is an externally managed investment company that has elected to be treated as a business development company under the Investment Company Act of 1940 and as a regulated investment company, or RIC.

A Business Development Company (“BDC”) is an investment company that invests in small and mid-sized businesses. Investors can buy shares in a BDC, and the money from their investments are used to fund the businesses. In turn, investors can profit from dividends paid on their investments, or, in some cases, the sale of their shares. For an in depth look at BDCs, go here.

According to BDC Reporter, PennantPark Investment (PNNT) reported fiscal full year results for 12 months ended September 2016. Given the high concentration in energy investments, the results were disappointing, with a distribution cut from $0.28 to $0.18 per share. The distribution was unchanged for ten years.

In addition, PennantPark pledged to move up the balance sheet from a lending point of view in the future which suggests they will be generating a lower gross yield.

Like all investments, BDCs do not come without risks. Limited liquidity, distributions that may not be guaranteed in frequency or amount, and limited operating history are just a few risks that investors take on when investing in a BDC.

Business Development Companies can be a good investment for the right investor, along with a diversified portfolio and sufficient due diligence. BDCs should only be recommended to those investors who are able to both weather substantial losses and those who are not in need of immediate liquidity. Investors should be particularly cautious of riskier non-public and non-traded BDCs.

In addition, PennantPark has sponsored several private placements to raise capital through the sale of equity or debt securities without having to register their securities with the SEC. These investments are often riskier and more complicated than traditional investments, and are only suitable for high net worth, sophisticated investors.

Despite the risks of investing in private placements, brokerage firms continue to push this type of investment because of the high commissions associated with their sale and creation.

The White Law Group is currently investigating the following PennantPark offerings, among others:

Pennant Credit Opportunities Fund LP
Pennant Fund LP
Pennant Master Fund LP
Pennant Spinnaker LP
Pennant Windward Fund LP
PennantPark Credit Opportunities Fund LP
Pennant Onshore Partners LP

If you invested in PennantPark BDC and would like a free consultation with a securities attorney, please call The White Law Group at 888-637-5510.

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Vero Beach, Florida.  For more information on the firm and its representation of investors, visit http://www.whitesecuritieslaw.com.