BDC Report for Q4: “The Party’s Over”

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An analysis by member 1markb44

“The party’s over, it’s time to call it a day…” : famous lines from a great old standard by Green, Styne and Comden.  Maybe things aren’t that bad, but the post-election exuberance for private money is definitely finito.  Many BDCs saw a 10% or more run up between November and January, and there was money to be made from price appreciation, along with the usual high dividends.

People need to realize, though, that for BDCs that’s a very unusual event.  You buy them to collect the (hopefully) stable large dividends they pay, not to see them act like a growth stock.  So let’s take a look at the important thing—how are various BDCs faring in the new reality of spread compression, with the threat of tariffs looming and receding on a weekly basis?

As is usually the case in more stressful times it becomes easier to see who the winners are—and who aren’t.  With all the BDCs I follow reporting their Q4 results I can spot members of both camps.  One gets a gold star, one blotted its copybook (a British phrase I love), and many did well enough.