Research Studies and Opinions

A Q&A with Henri J. Steenkamp: Chief Financial Officer of Saratoga Investment Corp

Question: What should the relationship between a BDC and portfolio company be?

HS: We are a financial partner and corporate finance expert. We have invested in what they’re doing because we believe in their vision and their future. We prefer to communicate regularly with management and understand what they are doing and where they’re going. We also like to participate in some of their discussions and decisionmaking and figure out either how we can help them or how we might bring other partners to the table to assist them. However, I don’t want to overstate our involvement. In most cases, we are not a control investor. We’re thrilled to help when asked, and offer managerial assistance whenever possible. The nature of our relationship also depends on whether or not the company is sponsored by a private equity firm.

Question: How so?

HS: In a deal sponsored by private equity, a BDC tends to be more of a passive investor and in a non-sponsored deal BDCs tend to be more active…

Read the full article at Saratoga Investment Corp.