Some Green(ish) Shoots in Flows

Research evidence excerpt

Some Green(ish) Shoots in Flows

FICC Research

Credit Research

24 June 2026

Business Development Companies (BDCs)

We see some green shoots in the equity flows of perpetual

BDCs, but not enough to call a bottom. Headline outflows

reported this quarter remain elevated, but marginal Peter Troisi +1 212 412 3695

redemption requests (we explain) declined q/q. June inflow peter.troisi@barclays.com

trends were better too, but one month does not make a BCI, US

trend. Justin+1 212 526Moreno4074

justin.moreno@barclays.com

BCI, US

Relative Value Ishika+1 212 Goyal526 3789

Year-to-date BDC index excess returns flipped to positive in May, and at 62bp currently, are ishika.goyal1@barclays.com

underperforming the IG corporate index by only about 12bp (Figure 1). The degree of relative BCI, US

underperformance has narrowed by over 100bp since March, and we believe it could continue to

narrow, given the carry in the BDC sector and a dearth of spread in the IG market. Investment

grade BDC composite spreads, at +190bp OAS, are only 13bp wider year to date, and are roughly

70bp off the wides reached in mid-March (Figure 2). BDC composite OAS has traded in a narrow

7bp range over the past month – far less volatility than was realized earlier this year. We expect

this relative spread stability to continue as investors have a better grasp of near-term and

longer-term risks in the sector.

FIGURE 1. BDC Excess Returns

Exs Rtn (%) YTD Excess Returns OAD (RHS) OAD

1.4 1.5

1.2

2.0

1.0

0.8 2.5

0.6

0.4 3.0

0.2

3.5

0.0

-0.2 4.0

NMFC OBDC GSCRED OTF OAKSCF GSBD ARCC SIXSLP BCSF IndexIG Index Index TSLX OCINCC BXSL HTGC GBDC ARESSI APODS BARPCC NHPIFS BCRED GCRED HLEND

Finco BDC

Source: Bloomberg, Barclays Research

This document is intended for institutional investors and is not subject to all of the