Investment Opportunities in Small, Middle Markets

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Oct. 21 (Bloomberg) -- Saratoga Investment CEO Chris Oberbeck discusses investing in small- and middle-market companies with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)

Just explain, how did you end up at saratoga?

You have been in the drive it equity industry since 1987. that's right.

I was at saratoga partners, when we sold dylan reid to saratoga, it was swiss bank that merged with ubs.

Interestingly, they did not have a glass-steagall exemption because they invested in industrial corporations.

We spun off as an independent entity in 1988. we did private equity for while, although we were interested in the credit strategy side of the business.

We were looking for credit opportunities, so in the downturn, there were a number of distressed entities.

We found one that was distressed and we were able to make a rescue financing of the company in 2009-2010. what advantages do you offer to investors?

To investors, basically, if you are an institution or an individual, you have access to a lot of private equity investment.

If you are an ordinary investor, it is difficult to get access to those funds.

We are traded on the new york stock exchange.

We provide generally superior returns over the long run.

And the dividends you pay are not taxed at the corporate level, like a real estate investment trust.

It is very much like a real estate investment trust or a master limited partnership.

What kind of companies are you dealing with now?

We see lots of small, niche companies.

That is what we focus on.

We have a passport expediter.

We have companies that provide information to hotels on competition, like who is providing conferences in different hotels.

We finance restaurants, franchise or's -- franchisers of expediting companies, things like that.

What kind of economies are they seeing?

I keep hearing about business uncertainty, climbing costs, increased regulation.

What has been the grassroots response?

The companies we would see would be the companies that are seeking financing.

These days, the company seeking financing are largely focused on growth.

So they are seeing opportunities to expand.

That is the largest category companies -- largest category, companies that want to open stores.

There are companies that might have a shareholder structure where they are looking to take one shareholder out and recapitalize around the existing shareholders.

Is business good now?

I think business is ok.

I wouldn't say it is great, but it is solid.

The opportunities we see in the smaller market, these companies don't operate necessarily -- gdp growth is not what drives them necessarily, it is their own opportunity.

Some of these companies are growing rapidly.

As far as access to capital, has that been an issue for you?

No, fortunately, we have quite good access to capital.

This text has been automatically generated. It may not be 100% accurate.


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