Direct Lending Digest: Normalization in Credit Trends

The direct lending industry is seeing a normalization of credit trends, with non-accruals approaching historical levels (1.87%) and significant retail redemption pressure in evergreen BDC funds.

Key Takeaways

• 1.Credit quality is deteriorating from cyclical lows, with non-accruals rising to 1.87% industry-wide.
• 2.There is a sharp divide in performance between public BDCs (3.23% non-accruals) and non-traded retail evergreen funds (1.26% non-accruals).
• 3.The retail wealth channel is experiencing significant stress, with gross inflows down over 60% and redemption requests spiking to an annualized 50% rate.

Table of Contents

• Credit Trends: Modestly declining (though concentrated) credit trends, with widening dispersion among managers
• Volumes and Spreads: Origination volumes, pipelines and pricing
• Market Sizing: Gross/Net Asset Trends, Asset Composition, and Flows
• Appendix
• Disclosure Appendix

Document Preview

Page 1 of 5

Subscribe for full accessStart Free Trial