Gannon: ‘Credit Remains King,’ and BDCs Are Wearing the Crown
In the second quarter of 2025, the aggregate net asset value of non-traded business development companies grew by 9.3% compared to Q1 2025 and by 47.6% year-over-year. This is according to the latest analysis by Robert A. Stanger & Company Inc., an investment banking firm and leader in alternative investment industry research.
The Stanger NL BDC Total Return Index – which has been measuring the quarterly performance of non-listed BDCs since December 2015 – has now recorded positive total returns in 12 consecutive quarters, and all but one over the past five years.
“Publicly registered, non-traded BDCs continue to dominate alternative investment capital formation, with more than $23 billion raised year-to-date,” said Kevin T. Gannon, chairman and chief executive officer of Robert A. Stanger & Company Inc. “When including private placement BDCs, that figure exceeds $30 billion. Credit remains king, as these funds continue to deliver double-digit distribution rates to investors.”
FS Specialty Lending Fund led the non-traded BDC market in Q2 2025 for three-month total returns at 4.8%. This followed its NAV-based total return of 2.29% during the first quarter. PGIM Private Credit Fund topped one-year returns for the third consecutive quarter with a total return of 13.7%. Blue Owl Credit Income Corp. captured the three-year total return lead at 12.7%, while Blue Owl Capital Corp. II once again led the five-year rankings, more than doubling its next closest competitor.
“FS Specialty Lending Fund is planning a NYSE listing by year-end, believing its scale, management team experience, and portfolio construction position it well for the public markets,” said Gregory R. DiSalvo, managing director at Stanger. “The fund seeks to follow the recent success of MSC Income Fund Inc., which listed its shares in January and traded above its pre-listing NAV for nearly six months before a market pullback in late July.”
Perpetually offered, non-listed BDCs that update their NAVs no less frequently than monthly and that have a minimum of one calendar quarter of performance are included in the Stanger NL BDC Total Return Index. As of Q2 2025, the index currently includes 25 BDCs with a total of 52 separate share classes.
Alts’ fundraising totaled approximately $86.4 billion through June 2025, a year-over-year increase of more than 50% compared with the $57.4 billion raised through June 2024, according to Stanger. The aforementioned non-traded BDCs led the surge with an estimated $23.2 billion; other private placements, including infrastructure and private equity offerings, at $19.5 billion; interval funds at $18.2 billion; and private business development companies at $7.3 billion.
Robert A. Stanger & Co., Inc., founded in 1978, is an investment banking firm specializing in providing investment banking, financial advisory, fairness opinion and asset and securities valuation services to partnerships, real estate investment trusts, and real estate advisory and management companies in support of strategic planning and execution, capital formation and financings, mergers, acquisitions, reorganizations, and consolidations.
Click here to visit the AltsWire directory page.
