January 4, 2024
Update on Perpetual Non-Traded BDCs: Increasing Competition May Drive Performance Divergence Among BDCs
BCRED is the largest, with $51.7 billion in assets at 3Q23, followed by Blue Owl Credit Income Corp. and HPS Corporate Lending...

FitchRatings

Recent Developments Rapid Growth: Perpetual non-traded business development companies (BDCs) have grown rapidly since Blackstone Private Credit Fund (BCRED) was launched in January 2021. Fitch Ratings estimates that perpetual non-traded BDCs accounted for 39% of BDC assets, based on the AUM of the top 49 BDCs tracked by SOLVE, as of Sept. 30, 2023. BCRED is the largest, with $51.7 billion in assets at 3Q23, followed by Blue Owl Credit Income Corp. (OCIC; $15.1 billion) and HPS Corporate Lending (HLEND; $8.1 billion). Fitch expects this growth to continue as recently launched BDC portfolios ramp up. Fitch closely tracks data on 19 perpetual non-traded BDCs, shown in the table on page 2. These are larger players in the space, an affiliate of a Fitch-rated BDC or affiliated with a large investment manager. Assets for these 19 BDCs grew 41% on average over the past year, led by Oaktree Strategic Credit Fund (OSCF), which grew 323% through 3Q23. Deteriorating Sector Outlook: Fitch’s 2024 sector outlook for BDCs is deteriorating, reflecting the expectation for weaker asset quality metrics, given increased debt service burdens for portfolio companies resulting from elevated interest rates and a challenging funding landscape amid a slowing economy. Low Losses, So Far: Given their short operating histories, perpetual non-traded BDCs continue to have relatively low levels of investments on non-accrual, averaging 0.3% of debt investments at cost and 0.1% at fair value at Sept. 30, 2023.

READ FULL REPORT

Recent

If Not 60/40, What? Managers and FAs Weigh In

If Not 60/40, What? Managers and FAs Weigh In

To complement portfolios, advisors are adding exposure to alternatives through funds focused on specific strategies, preferring niche over multi-strategy funds, industry observers said.
An Advisor’s Guide to Elections and the Markets

An Advisor’s Guide to Elections and the Markets

YCharts’ latest guide, How Do Presidential Elections Impact The Market? answers the most commonly asked questions that financial advisors hear from clients during an election year.

Most Popular

Blue Vault Q2 2023 Performance Reports Update

Blue Vault Q2 2023 Performance Reports Update

Blue Vault Q2 2023 Performance Reports Update 10-3-2023 Blue Vault wishes to acknowledge and apologize for the delay in publishing some Q2 2023 NTR Individual Performance Pages (IPPs) as well as the full review. We recently added additional reporting metrics to our IPPs, and that, combined with coverage of all share classes and some additional…
Blue Vault Q2 2023 Performance Reports Update

Blue Vault Q2 2023 Performance Reports Update

Blue Vault Q2 2023 Performance Reports Update 9-25-2023 Blue Vault has published the Q2 2023 Nontraded BDC Industry Review as well as Individual Performance Report and Limited Operations pages for the following offerings (newly published pages in bold font): Nontraded REITS American Healthcare REIT Q2 2023 Apollo Realty Income Solutions Q2 2023 (limited operations) Ares…

Explore

Blue Vault Logo
Don’t miss alts news
and educational events

Subscribe Now