The People Media exit demonstrated ACAS can make profitable exits in these rough times. Although ACAS claims its equity investment represented a compounded annual rate of return of 76% over the life of the investment, ACAS invests at multiple altitudes on the balance sheet; zeroing in on the equity may be sexy, but it's not the whole picture. The whole picture -- senior and subordinated debt, plus the convertible preferred stock apparently identified with the 76% statistic -- shows a compounded annual rate of return of 35%.
Thirty-five percent compounded annual returns aren't shabby. The $57 million in cash ACAS received will definitely help, even if ACAS doesn't benefit from realizing a $15 million gain in the quarter (lifetime investment gain of $26m).
Opportunities like this suggest why ACAS might be interested in liquidating AGNC shares that are producing returns exceeding 20%.
With Deutche Bank apparently voting in favor of the funds management expertise of ACAS, the future of its funds management business may be looking up.