A lot has happened in the BDC space over the past year. While there is seemingly no shortage of new managers launching non-traded BDCs, shake-ups in the market are making it harder for firms to enter the space or bulk up quickly. This leaves those already at the top holding on to their market share and others dwindling or falling prey to a wave of consolidation.
This year we are including a list for non-traded BDCs for the first time. Private BDCs are the standard way to enter the space nowadays. BDCs, both private and public, usually list their “total assets” inclusive of leverage, which we are also including in our rankings.
Leading the public BDCs, you will find Ares Capital, which has run the largest of its type for some time. American Capital, which was in the second spot last year, has fallen two places and is being acquired by Ares (the deal is expected to close in Q4).
Among private BDCs, the four non-traded vehicles at Franklin Square, which are sub-advised by Blackstone/GSO, have landed in the top spot, some $8 billion ahead of the Corporate Capital Trust vehicles (managed by CNL Financial and sub-advised by KKR).
M&A activity is rampant among both public and private vehicles. Aside from the ARCC/ACAS transaction, Fifth Street has been shopping itself around due to reputational issues and BDCA is in the process of selling itself to Benefit Street Partners.
Despite some of the challenges and consolidation, new non-traded BDCs keep coming to market. Between growth on one side and consolidation on the other this list could look a lot different in years to come.