Looking around the market, I see the private equity stocks trading a lot closer to their 52-week lows than their highs. This is an opportunity to lock in their shareholder distributions at an unusually attractive level . . . but as we rotate out of lower yields in the process, something has to go. I think that’s Sysco (SYY), which has done OK for us but doesn’t have a lot of easy near-term upside to chase. At best, we might break even there if we hang on a few months. And the dividends don’t really compensate us for our patience.

We’re doing this because BlackRock’s specialty finance unit TCPC is now 20% below its 52-week high and just paid its most recent $0.34 per-share dividend. After 12 years of never missing a payment, that distribution looks reasonably stable, especially after the parent company folded another middle-market loan portfolio into this one. Last quarter, the company booked $0.46 per share in profit, so there’s plenty of money to work with. As for the stock, net asset value of $11.14 per share isn’t wildly discounted but suggests some upside potential. Either way, we’re here for those dividends.

Sell SYY and establish a position on TCPC below $11 to lock in a 12.6% annualized yield. Inner Circle, buy TCPC as well.