BDCs with $4 billion or more in investments are weathering the impacts of the COVID-19 pandemic better than those that are targeting lower and middle market businesses.
The BDC industry will evolve toward favoring the largest players who can make use of their scale to both address more attractive parts of the market and leverage their cost bases.
The need to differentiate from the competition is essential as the competitive BDC landscape tightens up, with more lenders bidding on the same deals and many BDCs trading below net asset value.
Following the lockdowns and onset of impacts of the coronavirus, when the stock markets went into turmoil, many business development companies (BDCs) took a step back to avoid the worst of the effects.
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