Jonathan Bock — the influential analyst who brought transparency to a niche lending sector — is leaving Wells Fargo to become chief financial officer of a business development company (BDC) being acquired by Barings.
Barings announced the hire Thursday afternoon. It has agreed to purchase the publicly traded Triangle Capital Corporation and, pending stockholder approval, plans to rebrand it as Barings BDC. Bock is to report to Eric Lloyd, currently Barings’ head of global private finance and the vehicle’s planned CEO.
BDCs are public and private direct-lending vehicles — similar in structure to real estate investment trusts — that extend loans to middle-market companies. As the private credit asset class heated up over the last several years, Bock’s quarterly “BDC Scorecard” became a primary investor guide to the esoteric space.
[II Deep Dive: Be Damned Careful]
“It all happened pretty fast,” Bock told Institutional Investor earlier this year, describing his specialty’s quick ascent. “Now it’s not a matter of being excited for the growth. Sometimes slower growth can be good — particularly when we’re outlining that investors need to be very careful who they invest with. I don’t really care about being hot or not. I care about the sector being built better.”
For example, he has advocated for more investor-friendly fee structures, which some firms have begun to adopt. Those that haven’t can no longer hide their practices from Well Fargo’s research spotlight, and may end up at the bottom of the Scorecard’s rankings or critiqued in a research note.
“Jonathan’s commitment to BDC shareholders and institutional LPs is widely recognized and has made him one of the most respected voices in the industry,” Lloyd said in the statement.
Bock praised Barings’ private credit team, as well as the terms of the Triangle Capital deal. “Barings’ proposed low fee structure, share repurchase/tender, and large initial investment at net asset value shows the firm is committed to these interests and put it in a very narrow class of investor-friendly BDC managers,” he said.
Wells Fargo’s most recent research note on Triangle Capital Corporation, distributed March 1, gave it an “outperform” rating based on the expectation that it would be sold.
