BDC Facts & Stats | 2 In recent years, non-bank lending to private equity-owned, small- and middle-market companies has increased significantly. Within this growing sector, business development companies (“BDCs”) have become an increasingly important source of capital for middle market borrowers and an increasingly important vehicle for investors seeking exposure to private credit. Private and non-traded BDCs in particular can offer sponsors relatively stable, long duration capital while providing investors with exposure to private credit without the daily price volatility associated with exchange-listed BDCs. At the same time, the maturation of the BDC market has resulted in greater focus on portfolio quality, valuation, liquidity management and concentration risk. Since 2020, assets under management by BDCs have increased from approximately $127 billion to approximately $451 billion in 2025, representing a compounded annual growth rate in excess of 28%. This expansion reflects both continued investor demand for income-producing assets and increasing confidence in BDCs as long-term sources of capital for middle market borrowers. BDCs have also become an increasingly important mechanism for expanding access to private credit beyond traditional institutional investors. Private and non-traded BDCs, together with other permanent capital vehicles, have enabled asset managers to distribute private market strategies through wealth management and other channels while maintaining structures with limited or periodic investor liquidity. The expansion of these distribution channels is part of a broader trend toward making private market investments available to a wider range of investors. That trend is also reflected in the SEC’s regulatory agenda. On August 31, 2026, the SEC submitted its planned rulemaking, “Enhancing Retail Exposure to Private Markets,” to the White House Office of Information and Regulatory Affairs for review. The initiative is expected to address registered investment companies’ ability to invest in private market assets and related issues involving liquidity, valuation, affiliated transactions and board oversight. If adopted, the rules could further expand the channels through which retail investors obtain private market exposure and increase competition among BDCs and other registered investment vehicles. The SEC’s 2026 Registered Offering Reform proposal could also have a positive impact on the BDC market. The proposal would, among other things, broaden access to shelf registration for BDCs and registered closed-end funds that register securities on Form N-2. If adopted, these changes could allow qualifying BDCs to access the capital markets more efficiently and could affect the relative attractiveness of public, private and non-traded BDC structures. The proposal remains subject to notice and comment and its practical impact will depend on the final rules adopted by the SEC. The SEC also has continued to develop its co-investment framework, providing BDCs, registered funds and affiliated investment vehicles with greater flexibility to participate in negotiated co- investment transactions, subject to applicable conditions. These developments are particularly relevant to sponsors that operate multiple BDCs, private funds, registered funds and other investment vehicles because they can facilitate more efficient allocation of investment opportunities across affiliated platforms.
View this content as a flipbook by clicking here.