两个哈佛双胞胎（不，而不是那些双胞胎）经营世界上最糟糕的BDC。他们即将致富。

Okay, pay attention. Medley Management, for all intents and purposes, is really just twin brothers Seth and Brook Taube. They own the majority of Medley Management and are paid by Medley Capital, a business development company — more on this in a bit — to make investment decisions. They have, according to numerous analysts, including Wells Fargo,one of the worst records in doing this job of anyone in the entire industry。And despite a flurry of legal filings, public critiques, and a Delaware court ruling, they are now on the verge of convincing Medley Capital not only to keep paying them, but maybe even to buy them outright. How? Because this is exactly the way the world of BDC management works.

读者，被警告说：这是一个装满数字的故事，但数字不是故事。我可以告诉你Medley Capital的表现，因为它是公开的，因为它在行业盛开时发生的同时发生的壮举。我可以告诉您，BDC是禁止严重投资者禁止有意义的利益相关者的最后一个领域之一，并且法律允许在其他资金领域中是不可想象的。但我是什么去告诉你是梅德利，赛斯和布鲁克Taube的方式，以及他们的演习中的歇斯底里不是BDC世界的错误，而是一个特征。

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What you need to know is this :BDCs are essentially mutual funds that lend money to small and medium-size businesses.

随着过去十年的私人信贷的兴起，他们爆发了普及。BDCS和共同基金均由证券交易委员会的投资公司法案 - 近80年前撰写于1940年。Medley Management根据在采摘投资的好处收取激励费用来赚钱。它还通过年度管理费用以现金挣脱金，该费用是出于特殊或可怕的。

Medley的根源返回2005年。那是哈佛大学的Brook和Seth，与Richard Medley一起与Richard Medley一起推出了具有社会负责任的焦点的信用对冲基金。乔治索罗斯的前顾问Richard Medley在成立后一年后留下了大约一年（他在2011年去世），该公司下降了其任务的影响部分。在金融危机期间，Medley Management阻止投资者撤回他们的钱因为它努力出售非足资产。该公司稍后将六项对冲基金的六项最佳绩效的资产转移到现在的混合资本。这款双胞胎于2011年推出了BDC公众。（通过公共关系公司Gasthalter＆Cop的发言人，Taubes拒绝评论这篇文章。）

Medley launched its BDC just as the product was becoming popular with investors and advisers, who were clamoring to earn interest on their investments. Government and corporate bonds paid almost nothing, whereas private debt offered double-digit rates. Medley rode that wave of BDC popularity.

到2017年，Taube Brothers决定尝试出售Medley Management。为什么？因为它的财政处于混乱。经过多年的遭受糟糕的投资，Medley Capital和其他资金，它选择了对塞拉克拉的投资 - 包括一个叫做塞拉 - 正在萎缩，剥夺梅德利管理利润丰厚的管理和激励费用。

Taube Brothers并不完全疯狂，以认为他们可以出售资产经理。毕竟，BDC很热。发生了一堆有利可图的交易。

For one, Howard Marks’ Oaktree bought Fifth Street Asset Management — as bad a performer as Medley — for $320 million in cash. This was after Fifth Street settled a class-action lawsuit claiming the manager had inflated the value of its investments, and while the SEC was also investigating the firm. Fifth Street settled with the SEC over the allegations, which included the valuation lapses, at the end of 2018. What’s more, even though the board of Medley Capital could have fired Medley Management at any time, with a new asset manager even paying shareholders for the management contract, the Taubes didn’t need to worry about that either. Josh Easterly, a Goldman veteran and CEO of TPG Specialty Lending’s BDC — one of the industry’s best — failed to win a proxy fight to take over another poorly performing BDC in 2016. TICC Capital, the manager of the BDC, didn’t want anything to do with TPG because it wouldn’t have gained anything in the deal. If Easterly couldn’t do it, according to industry experts, bad managers had nothing to fear.

但陶布错了能够出售— at least at the price they wanted.

当第一次尝试出售这一年失败了,the brothers fired their bankers and hired new ones. One CEO of a credit shop laughed when a new banker called him about the same deal. It’s true that almost every major credit manager out there took a look at Medley, with many even signing nondisclosure agreements barring them from separately offering to save shareholders and manage investments for Medley Capital directly. But almost none of these firms were seriously interested in buying Medley Management; it had invested in deals that many thought were terrible, with some doubting the prices Medley had assigned to the private assets in its portfolios.

Taubes可能无法说服资产经理购买Medley Management，但他们可能能够说服Medley Capital的股东购买Medley Management - 这位顾问已经失去了一半的钱。

Huh? Yup.

在2018年春天，布鲁克Taube提出了这个想法，因为他面临着另一个盈利的前景来电，因为可以提供某种交易。

Here’s what Medley Management ultimately proposed at board meetings in June. Sierra, a private BDC held by retail investors who rarely vote their shares, would merge with Medley Capital. The combined BDC would buy Medley Management at a far higher price — a 100 percent premium to its stock price at the time — than anybody had offered the year before, despite its performance being even worse. Taube argued that the combined BDC would have the advantage of scale and that a few BDCs with so-called internalized managers traded at higher multiples than those with external managers because costs were often lower. The proposal also included lucrative employment contracts at the “internalized manager” for the Taube brothers and a college friend who was also an executive at Medley. For the Taubes, employment contracts were even better than just management fees.

But the Taube brothers needed to deal with the inherent conflicts in a three-way merger where all the organizations were interconnected and had boards filled with many of the same directors. For one, Medley Capital’s inside directors, including the Taubes, also sat on the boards of Medley Management and Sierra. To adhere to governance rules requiring that the deals be done fairly, each board created a special committee made up of independent directors — those presumably without ties to the Taubes — to evaluate the merger.

问题是，美德利资本导演并非真正独立。“代理人创造了误导性印象，即特别委员会复制了ARM的谈判在暗示拟议的交易中，”读了一个从特拉华州校政法院意见。法院在2019年3月审判后发出了意见，当时美妙的资本大型股东起诉停止交易。

Yes, dear reader, it was complicated — yet plenty of law firms, bankers, and consultants were happy to help. And just as happily, BDC rules allowed all these fees to be paid from the assets of Medley Capital and Sierra.

Board members went to work hiring bankers and other advisers to compare executive pay packages and run “comps” on other BDC deals. Though management wasn’t supposed to influence any of the decisions, Brook Taube was busy texting the independent directors of the special committees and their bankers throughout the process, pushing them to speed it up. He admonished them not to consider “interlopers,” or other asset managers that were expressing interest in the deal. Directors in turn were enthusiastically texting and emailing back that they were behind him. One independent director texted Taube, “Are we on track? Anything you need from me?” Taube responded, “Let’s talk soon / Pushing Hard :-),” according to court documents.

董事也与他谈判，以便继续雇用作为新组织委员会的董事。

根据校长法院案件，他还致力于将董事保留在黑暗中，涉及可能影响其决定的关键细节。他没有告诉他们他在2017年潜在买家所做的一些让步。他并没有告诉他们，由于暗示管理的表现令人担忧，唯一严重的投标人已经下降了价格。他并没有告诉他们，像折纸资本合作伙伴这样的公司已经达到了几次与美德资本的交易。

他甚至没有告诉他们他们可能更不用好说太多的优惠，因为许多公司于2017年签署了协议，而不是为混合利力发挥作用。那些协议令人惊讶的是，仍然有效。

有效。到2018年8月，董事会在不考虑任何替代方案的情况下进行了绿化了这笔交易。现在是时候向股东宣布这一点，所以他们可以在2019年初举行会议的协议。

不幸的是，对于Taubes来说，Medley Capital股东 - 至少是较大的资本股东 - 是生气的。

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These shareholders havenames just as generic and nebulous as Medley’s: Roummel Asset Management, FrontFour Capital, BLR Partners, and Moab Capital, among others. Soon after the boards’ approval, FrontFour called Medley to find out how a deal like this could have happened.

Their investments were worth a fraction of what they paid, they knew, but somehow they were going to buy the very manager that had made those investment decisions.

Shareholders published open letters, detailing what a bad deal it was and calling for others to vote no.

The shareholders were vocal. But in reality they didn’t have a lot of power: Rules prohibit hedge funds from owning more than 3 percent of a BDC, so no one could get a big enough stake to force Medley out.

FrontFour decided to sue in January 2019, pushing Medley Capital to produce books and records. By early February, Medley had postponed the vote on the deal.

Between January and March multiple asset managers, including Marathon Asset Management, expressed interest in a deal to advise Medley Capital. NexPoint, a subsidiary of Highland Capital, published an open letter arguing that the board had never responded to two proposals it had sent to manage the investments of Medley Capital. NexPoint had even offered a lump sum to Medley Capital for the management contract and proposed to buy back shares to help its sinking stock. (Although Highland Capital has filed for bankruptcy protection, NexPoint has not.)

But the special committee didn’t seriously consider any of the offers. As the court said, the special committee’s “attitude is best captured” in a text from an independent director to Brook Taube: “Are we going to respond to every f**ksake on the planet?”

特拉华州的Chancery Court决定在被重新安排的股东投票前三月听到此案。该试验包括超过800个展品，包括塔管和董事会成员和银行家之间的诅咒文本和电子邮件。

发现混合金董事通过无能和违反治理规则违反了他们的信托义务。法官在审判后写了一篇小卒中意见，宣布整个过程不公平：“这次试验后的决定发现拟议的交易引发整个公平考试。Frontfour证明，一半的混合麦利首都特别委员会被认为是Taube兄弟，因此Taube兄弟在拟议的交易方面占主导地位并控制了董事会。“

It also found that the deal was driven by the financial onus on Medley Management. “Rejecting the deal would foreclose Medley Management’s only viable solution to the enormous financial pressure they labored under,” said the opinion.

法院要求美德资本回到绘图板，并披露股东，股东其董事尚未独立行动，第三方管理人员已经承担了抵押贷款，以接管美德利资本的投资决定。

“作为救济，Frontfour寻求潜在的购物过程，没有Medley Management的影响，没有任何交易保护，加上全面披露。一个障碍阻止法院发出这种救济：Frontfour未能证明收购者，塞拉，助攻和怂恿其他被告违反信托职责，“在此意见中写道。由于这种技术性，法院并没有永久停止交易。

审判后，Frontfour定居并在董事会上获得了两名独立董事。作为结算的一部分，合并提案将包括找到Medley Capital的“优越”交易的过程。

Two directors whose humiliating texts were included in the court opinion resigned.

Two months later, though, Medley put one of the Taube brothers and one of the independent directors blasted by the court up for reelection. Even proxy voting firms Institutional Shareholder Services and Glass Lewisadvised shareholders to vote against the incumbents。但由于Taube兄弟（包括通过合资企业）的统治和巨额股票，这两者被重新收集。

因为它的部分，Medley表示，它通过在2015年改变其投资策略来解决绩效。根据投资者介绍，“梅利贷款平台将其重点转移到提供给更大的第一留置权贷款，赞助者支持借款人。”它还表示，它聘请了一个新的投资负责人和新的风险负责人，重新调整其投资委员会，增加了新的高级信用投资专业人员，并分开了不包销的起源活动。

In August 2019, Medley refiled regulatory documents on the proposed merger with pages and pages of new disclosures required by the Delaware court, including information about the attempt to sell Medley Management in 2017. This time, Medley Capital’s board ran a so-called go-shop, evaluating proposals from asset managers to replace Medley Management. Sources say there were few asset managers interested in the job at this point.

2019年10月，Medley宣布它没有收到任何“优越”的提案，以与其姐妹塞拉融合并以溢价购买Medley Management。

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Some experts believeactivists could prevent situations like Medley’s by holding management’s feet to the fire and pushing for changes.

作为使其规则的更大努力的一部分，证券交易所提议增加一个基金可以拥有另一个基金的金额。但改变不会完全解决问题，因为机构不会得到更多的投票权。

在向委员会的评论信中，TPG专业贷款旨在扩大现在约束BDC激活主义的限制。“由于所有权和投票限制的后果缺乏治理责任，继续允许管理的BDC在没有任何实际威胁的情况下对管理的现役，”东方写道。这封信包括一些令人惊讶的分析：底部四分位数的BDC，谈到年度股权的回报基本上永远留在那里。

Taube兄弟的复杂传奇可能是一个简单的佐贺。

BDC板有最终的力量：它可以发射经理做坏事。这对BDC来说尤为重要，因为投资者不能撤回他们的钱。

但是，即使在较大的共同基金世界中，没有董事会曾发现经理，这落在了同样数十年的旧规则下。最后一次忠诚投资，资本研究和管理，或17万亿美元共同基金世界的任何其他资产经理被解雇，因为表现不佳？

BDC是基金世界的一小部分，但是一名球员测试了治理规则是否真正保护投资者。在股东投票后，仍然需要批准Medley交易的SEC。

投资者将要注意决定。