“The pendulum has certainly swung toward BDCs, but I would caution those who would suggest it will always be this way”
Venable partner Chuck Morton was quoted in a February 7, 2014 article in The Deal Pipeline on the surge of business development companies (BDCs) in recent years, in terms of their number and success as lenders in private equity middle market deals.
Morton said, “This is certainly a cycle when BDCs have done very well. If you just look at the number of BDCs that have gone to market over the past few years, it really is a stunning number. BDCs are taking more deals because they are able to price capital very competitively given the way they access capital through the public markets.”
“The pendulum has certainly swung toward BDCs,” Morton added, “but I would caution those who would suggest it will always be this way. For example, if there is a deeper correction in the public markets, or if the BDC asset class were to become less attractive for whatever reason, the pendulum could swing back.”