November 2, 2016 Comments (0) Blog, Current Investigations

Triton Pacific Investment Corporation BDC Investment Losses

(Last Updated On: June 27, 2017)

Have you suffered losses investing with Triton Pacific Investment Corporation? If so the securities attorneys at The White Law Group may be able to help.

Triton Pacific Investment Corporation (TPIC) is an externally managed investment company TPIC’s objective is to generate growth and income by investing in both debt and equity securities of small and mid-size private businesses. Triton Pacific Investment Corp. is a Business Development Company (BDC).

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.

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.

Here are just few of the disclaimers for investors on Triton Pacific’s website:

Investing in our common stock involves a high degree of risk. You should purchase these securities only if you can afford a complete loss of your investment. See the section entitled Risk Factors in the current prospectus for a more detailed discussion of the risks which should be considered in connection with your investment in our common stock, including, but not limited to:

  • We are a new company and have a no operating history and are therefore subject to the business risks and uncertainties associated with any new business, including the risk that we will not achieve our investment objectives.
  • Triton Pacific Adviser, LLC (“TPA”), our investment advisor, has not previously managed a business development company or a regulated investment company (“RIC”). Therefore, TPA may not be able to successfully operate our business or achieve our investment objectives.
  • Economic activity in the United States was impacted by the global financial crisis of 2008 and has yet to fully recover. These conditions may make it more difficult for us to achieve our investment objectives.
  • Because there is no public trading market for shares of our common stock and we are not obligated to effectuate a liquidity event by a specific date, it will be difficult for you to sell or otherwise liquidate your shares.
  • The amount of any distributions we may make is uncertain. Our distributions proceeds may exceed our net investment income, particularly during the period before we have substantially invested the net proceeds from our public offering. Therefore, portions of the distributions that we make may represent a return of capital to you for tax purposes.
  • We have elected to be treated as a RIC for federal income tax purposes. Failure to maintain our qualification as a RIC would subject us to federal income tax on all of our income, which would have a material adverse effect on our financial performance.
  • As a result of the annual distribution requirement to maintain our qualification as a RIC, we will likely need to continually raise cash or make borrowings to fund new investments. At times, these sources of funding may not be available to us on acceptable terms, if at all.
  • We are subject to financial market risks, including changes in interest rates, which may have a substantial negative impact on our investments.
  • An investment strategy focused on primarily on privately-held companies presents certain challenges, including the lack of available information about these companies.

In addition, Triton Pacific Investment Corporation 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 Triton Pacific offerings, among others:

Triton Pacific Income & Growth Fund III LP
Triton Pacific Platinum Fund III LP
Triton Pacific Platinum Fund IV LP
Triton Capital Fund LP
Triton Opportunity Fund
If you invested in Triton Pacific 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.