Business development companies are set for their worst year relative to the S&P 500 since 2020, leading some investors to question their future in the $1.7 trillion private credit market.
The Cliffwater BDC Index, which tracks 41 vehicles that house direct loans, is down about 6.6% this year through Dec. 24, versus the S&P 500’s roughly 18.1% gain, according to data compiled by Bloomberg. In 2023 and 2024, the BDC index gained about 25.4% and 14.1%, respectively.
The vehicles have been pummeled by a storm of rate cuts, market blow-ups and rising signs that the market is set to experience ...