Big and Small Opportunities in High-Yield Stocks

The differences between lower middle market and upper middle market investments for high-yield business development companies.

Jordan Wathen
Jordan Wathen
Jul 16, 2014 at 2:32PM

Private equity is private equity -- until it isn't.

There are big differences between the lower middle market, where Triangle Capital (NYSE:TCAP) and Main Street Capital (NYSE:MAIN) invest, vs. the true middle market, where larger players like Ares Capital (NASDAQ:ARCC) pick up most of their deals.

It's not just about the size of the companies -- though size does matter. Instead, it's about risk, returns, and the alignment of investors and management teams in companies all around the United States.

See how a Triangle Capital or Main Street Capital portfolio company would differ materially from a portfolio company at Ares Capital Corporation. 

In the following video, Motley Fool Financials Bureau Chief David Hanson and Fool contributor Jordan Wathen discuss the differences between lower and true middle market businesses.