I know this isn't necessarily the correct forum to post this in but am just curious what people think about the poor performance of some of the bigger name BDC's.
For some background to those that are unfamiliar, average leverage on a lot of middle market company LBOs just one year ago was 3.5x / 5.0x range and now has been pushed up to 4.5x / 6.0x range with minimal rates and fairly loose terms. An article in January on a survey conducted by Carl Marks Advisors was pretty interesting and talks about the growing concern by Mezzanine and BDC investors on the future of their portfolios given higher leverage and default rates.
I guess my main question is, are the poor performance at some fairly big size BDC's such as Triangle and Medley an indicator of future market woes in the world of middle market private credit? If so, how will this impact PE? I don't really have much experience with the industry so would appreciate any thoughts that some of you guys may have on the near term future of private credit as we continue to keep riding an aggressive market.
Below are the articles on Triangle and Medley:
Given the lack of traction, I am guessing this is just firm specific with poor underwriting.
Look at their 10-q, first thing I see is hundreds of millions of dollars of government guaranteed notes. That is a load of shit.
Are there a lot of other funds out there also sucking wind?
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