A majority of listed business development companies (BDCs) are currently trading at discounts to their net asset values, as investors weigh liquidity risks, portfolio valuations, and broader private credit market pressures, according to a report by Bloomberg citing LSEG data.
The figures show that flagship vehicles such as Ares Capital Corporation and Blackstone Secured Lending Fund are trading roughly 10% below NAV, while Blue Owl Capital Corporation sits at a more significant 25% discount.
BDCs typically raise capital from institutional and retail investors to provide loans to mid-market companies, often through instruments that are relatively illiquid and difficult to sell quickly. Recent months have seen substantial redemption activity as investors reassess exposure, particularly in sectors such as enterprise software, where AI-driven disruption is prompting concerns about future credit performance.
To manage outflows, several fund managers have implemented redemption limits. Ares Management capped withdrawals at 5% after investor requests reached more than 11% of shares, while other managers, including Apollo Global Management and BlackRock, have applied similar limits. Blackstone also executed share buybacks beyond the capped thresholds to support fund stability.
