BDC Troubles, 2025".....Wall Street fund managers want 401(k) plans to include private credit, but similar products they have already sold to individual investors are in sharp decline this year.
Some of the same money managers leading the charge to “democratize” private markets—like KKR and BlackRock—are among the worst performers in the publicly traded private-credit funds called business development companies.
Business development companies, or BDCs, typically make high-interest loans to midsize corporations with junk credit ratings, using income from the loans to pay big dividends to their investors. They have become a popular way for fund managers to draw mom-and-pop investors into the booming private-credit industry. Demand for BDCs surged and the cash they manage has more than tripled since 2020 to about $450 billion, according to the law firm Mayer Brown.....
The BDC selloff began this summer, after falling interest rates reduced income from the loans they own. Then, a $14 billion fund managed by KKR reported heavy losses from loans gone wrong, and a rash of alleged frauds in companies such as the auto supplier First Brands spooked investors. JPMorgan Chase Chief Executive Officer Jamie Dimon, who has a love-hate relationship with private credit, warned about more credit “cockroaches” lurking.....
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WSJ
https://www.wsj.com/finance/investing/the-private-credit-party-turns-ugly-for-individual-investors-287356f9Open at MSN
https://www.msn.com/en-us/money/companies/the-private-credit-party-turns-ugly-for-individual-investors/ar-AA1SLq0A
Comments
* and perhaps irresponsible / poorly-analyzed
https://cefdata.com/bdc-universe