One of the defining characteristics of mature consumer markets is not simply the abundance of products, but the quality of consumer decision-making. Across sectors, rising financial awareness, easier access to information and digital discovery are changing what people choose to buy and how they
Imagine reaching retirement with a bond portfolio that works like a staircase. One bond matures this year, another next year, and another the year after, giving you access to money at different points instead of having to unlock the entire investment at once
Augmont Enterprises IPO Day 2: The initial public offering (IPO) of integrated gold and silver platform Augmont Enterprises Ltd is witnessing its second day of bidding today, August 24. So far, the public issue has been subscribed 2.88 times. The Rs 825-crore IPO
Gold prices remain high in India; check 22K, 24K rates in Mumbai, Delhi, Bengaluru International gold prices also climbed to a more than three-month high on Monday. Published on: Aug 24, 2026, 13:46:24 IST By HT News Desk Prefer HTon Google Share via Copy link Gold prices remained high in India on
Nearly three-fourth of large-cap active funds underperformed a blended (LargeMidCap) benchmark over a 10-year period, according to the 2025 report by SPIVA (S&P Indices Versus Active). In this article, we discuss two reasons that could, perhaps
Indian Stock Market Today, August 24: The domestic equity markets opened higher on Monday, but gains remained measured as investors continued to track elevated crude oil prices and geopolitical tensions in West Asia. At 9:16 am, the BSE Sensex was up 205 points, or 0.26%, at 77,746.06
Businesses from India and the U.S. have expressed interest in investing in Bangladesh and made proposals to improve the country's investment climate, Commerce Minister Khandakar Abdul Muktadir has said. Mr. Muktadir’s remarks on Saturday (August 22
Minimalistic retractable door handles became a signature feature of electric vehicles (EVs), but the controversial designs are now at the centre of China's biggest car recall, affecting more than 4 million vehicles. The recall, which includes 2.98 million Chinese-made Teslas
Beware of bargains in private credit
Beware of bargains in private credit
Beware of bargains in private credit
It might make sense right now to look at investing in a business-development company whose shares trade at a premium to the underlying asset value.
Published on: May 16, 2026 4:41 PM IST WSJ Share via Copy link To paraphrase Winston Churchill, investing in a business-development company can be like buying loans, wrapped in a fund, inside a stock. Marc Rowan, Apollo Global Management’s chief executive. Some investors may be tempted to jump into these publicly traded private-lending vehicles, which have been beset by concerns about the credit risks of borrowers like software companies. Many of these vehicles are currently available at deep discounts to their asset values, sometimes with high dividend yields. Be greedy when others are fearful, they say. But buying shares of a BDC isn’t like buying a loan or a bond and just collecting the payments. And buying them cheaply doesn’t necessarily mean you will get more for your money. In fact, looking at those trading for a premium to their underlying net asset value could even make more sense right now. gfx For starters, many funds hold more than just loans. Their assets also often include equity stakes, sometimes even in other lending funds. These equity investments can be among the toughest for investors to assess. On top of that, BDCs often earn various kinds of fee income through their lending. These can be collected when borrowers prepay their loans early by refinancing, or when a new loan is arranged. Fees can rise and fall with how active the lending market is. That is a separate risk from mere credit risk. For example, Sixth Street Specialty Lending recently cited its outlook for a period of lower fees when discussing its decision to lower its quarterly base dividend. “Activity-based fee income can take several quarters to normalize following a market dislocation,” Sixth Street Specialty Lending Chief Executive Bo Stanley told analysts. Other features of the kinds of loans that BDCs make also play into the ups-and-downs of their income. Some loan payments can be deferred, or what is known as a payment-in-kind. The idea is that allowing a borrower to preserve cash can help it through a rough patch. But IOUs don’t bring in additional cash to the fund. So they can stress the ability of a BDC to keep paying its dividend, even if all its loans are technically current. Returns on private-credit funds can be higher than what is available on traditional loans or other forms of corporate credit. But that higher return can also reflect the risks that differ from other debts. Researchers from Ohio State University argued in a recent study that private-debt funds’ returns should be measured with “an approach that adjusts for both equity and debt related risks.” Marc Rowan, Apollo Global Management’s chief executive, has said that a more equity-like debt profile is what many investors were seeking out, particularly with BDCs. “This is not, people who have taken their Treasury portfolio or their investment-grade portfolio and gone into levered lending,” he told analysts on Apollo’s first-quarter call. “This is, people who have sold their equities to go into levered lending.” Thinking of a BDC more like a stock may also suggest a seemingly odd path forward: Focusing on funds trading at a premium to their net asset value. For a healthy fund to take advantage of the current anxious market by making higher-price loans, it may first need to raise more equity. That is much easier for a fund not already trading at a big discount. Sixth Street Specialty Lending is one BDC trading at a premium to its net asset value, currently around 10%. The stock did fall after the firm cut its dividend, narrowing that premium. But a dividend that is forgone for now isn’t necessarily gone forever. The Sixth Street BDC tracks so-called embedded fees it could earn from future activity. Some of funds’ activity fees also can act to protect them from loans being repaid early to be refinanced at tighter spreads. The ability to issue shares and lend at higher rates in the meantime also could boost future fee income. To maintain a premium, though, investors will also have to continue believing a fund’s loans are worth what it says they are. So even with all of the other things going on at BDCs, there is nothing enigmatic about their core mission: making good loans. Write to Telis Demos at Telis.Demos@wsj.com Stay updated with the latest Business News on Petrol Price, Gold Rate, Silver Rates, Diesel Prices along with Income Tax Calculator Home/Business/Beware Of Bargains In Private Credit See LessTo paraphrase Winston Churchill, investing in a business-development company can be like buying loans, wrapped in a fund, inside a stock.
Some investors may be tempted to jump into these publicly traded private-lending vehicles, which have been beset by concerns about the credit risks of borrowers like software companies. Many of these vehicles are currently available at deep discounts to their asset values, sometimes with high dividend yields. Be greedy when others are fearful, they say.
But buying shares of a BDC isn’t like buying a loan or a bond and just collecting the payments. And buying them cheaply doesn’t necessarily mean you will get more for your money. In fact, looking at those trading for a premium to their underlying net asset value could even make more sense right now.
For starters, many funds hold more than just loans. Their assets also often include equity stakes, sometimes even in other lending funds. These equity investments can be among the toughest for investors to assess.
On top of that, BDCs often earn various kinds of fee income through their lending. These can be collected when borrowers prepay their loans early by refinancing, or when a new loan is arranged. Fees can rise and fall with how active the lending market is. That is a separate risk from mere credit risk.
For example, Sixth Street Specialty Lending recently cited its outlook for a period of lower fees when discussing its decision to lower its quarterly base dividend. “Activity-based fee income can take several quarters to normalize following a market dislocation,” Sixth Street Specialty Lending Chief Executive Bo Stanley told analysts.
Other features of the kinds of loans that BDCs make also play into the ups-and-downs of their income. Some loan payments can be deferred, or what is known as a payment-in-kind. The idea is that allowing a borrower to preserve cash can help it through a rough patch.
But IOUs don’t bring in additional cash to the fund. So they can stress the ability of a BDC to keep paying its dividend, even if all its loans are technically current.
Returns on private-credit funds can be higher than what is available on traditional loans or other forms of corporate credit. But that higher return can also reflect the risks that differ from other debts. Researchers from Ohio State University argued in a recent study that private-debt funds’ returns should be measured with “an approach that adjusts for both equity and debt related risks.”
Marc Rowan, Apollo Global Management’s chief executive, has said that a more equity-like debt profile is what many investors were seeking out, particularly with BDCs. “This is not, people who have taken their Treasury portfolio or their investment-grade portfolio and gone into levered lending,” he told analysts on Apollo’s first-quarter call. “This is, people who have sold their equities to go into levered lending.”
Thinking of a BDC more like a stock may also suggest a seemingly odd path forward: Focusing on funds trading at a premium to their net asset value.
For a healthy fund to take advantage of the current anxious market by making higher-price loans, it may first need to raise more equity. That is much easier for a fund not already trading at a big discount.
Sixth Street Specialty Lending is one BDC trading at a premium to its net asset value, currently around 10%. The stock did fall after the firm cut its dividend, narrowing that premium.
But a dividend that is forgone for now isn’t necessarily gone forever. The Sixth Street BDC tracks so-called embedded fees it could earn from future activity. Some of funds’ activity fees also can act to protect them from loans being repaid early to be refinanced at tighter spreads. The ability to issue shares and lend at higher rates in the meantime also could boost future fee income.
To maintain a premium, though, investors will also have to continue believing a fund’s loans are worth what it says they are.
So even with all of the other things going on at BDCs, there is nothing enigmatic about their core mission: making good loans.
Write to Telis Demos at Telis.Demos@wsj.com
Source: HindustanTimes
Related Posts:
Tempsens Instruments India IPO Day 3: The initial public offering (IPO) of temperature sensing and heating solutions provider Tempsens Instruments Ltd is witnessing its final day of bidding today, August 24. So far, the public issue has been subscribed by a strong 31.34 times. The Rs 650-crore IPO
11 hours ago
S&P 500 just hit a level seen only once before in 155 years — could a market crash be next? The S&P 500 CAPE ratio hit 40 for only the second time in 155 years, raising concerns about valuations, future returns and a possible market correction. Updated on: Aug 23, 2026
14 hours ago
Anthropic $2 trillion IPO: Why investors think it could be worth more than SpaceX Anthropic could reach a $2 trillion IPO valuation as revenue surges, raising questions about whether the AI company can be worth more than SpaceX. Published on: Aug 23, 2026
14 hours ago
US President Donald Trump has said Canada wants "the benefits of being a State, without being one" after trade talks between the two countries collapsed late on Friday. In his first comments since negotiations broke down, triggering new 50% US tariffs on a range of Canadian goods
1 days ago
India’s payments sector has raised $5.8 billion across 371 equity funding rounds since January 2021, while producing eight initial public offerings (IPOs) and triggering 25 acquisitions, as the industry increasingly consolidates around a handful of well-funded players
1 days ago
Can Reddit survive in the AI era? It wants more cash for its data—and more of people’s time Published on: Aug 22, 2026, 16:40:48 IST The Economist Prefer HTon Google Share via Copy link Earlier this summer “Backrooms”, a horror flick, became one of the most successful independent films ever
1 days ago
What with a 250th birthday, Taylor Swift's wedding and the football World Cup, Americans could be forgiven for taking their eye off the ball this summer. But signs of economic trouble have been building. This week they hit the headlines when US national debt passed the $40tn (£29.4tn) mark
1 days ago
Insurance regulator IRDAI has directed Edelweiss Life Insurance and Pramerica Life Insurance, in separate orders on August 20, not to open new place of business for six months for non-compliance with Expenses of Management (EoM) limits in 2024-25
2 days ago
India remains a very attractive destination for global investments and its economic fundamentals form the basis for strong investor confidence, Jyoti Jeetun, the Minister of Financial Services and Economic Planning of Mauritius told The Hindu in an interview
2 days ago
A fresh wave of US tariffs on a wide array of Canadian goods has come into effect as of midnight on Saturday after a last minute break down in trade talks. Announcing the suspension of negotiations shortly before the Friday night deadline, Canadian Prime Minister Mark Carney said he would impose
2 days ago
TCS Employee Surveillance Row: Tata Consultancy Services (TCS), India’s largest IT services company, on Friday denied reports that it is using monitoring tools to track individual employee activity on company-issued laptops. The IT giant said the purpose of the tools is to monitor the overall
2 days ago
Walmart stock falls 9% as retailer finally brings Apple Pay, Google Pay Walmart stock fell 9% after earnings despite beating estimates and raising guidance. The retailer will add Apple Pay and Google Pay Tap to Pay from August 24. Updated on: Aug 21, 2026
2 days ago
TikTok has agreed to pay $400m (£293m) to the US to end a lawsuit alleging its platform violated children‘s privacy, marking one of the largest ever settlements over the issue. The deal stems from a 2024 suit by the Department of Justice under former President Joe Biden alleging TikTok and its
2 days ago
What’s next for Nvidia after the AI chip boom? Wall Street wants more—here’s what investors need to know Nvidia stock faces high expectations ahead of August 26 earnings as Wall Street watches AI growth, valuation, open-source models and Nvidia's next big story. Updated on: Aug 22, 2026
2 days ago
Costco dividend rises: Why a $10,000 investment pays only $61 yearly A $10,000 Costco investment earns only about $61 a year in regular dividends. Here’s why investors still buy COST for growth and special dividends. Updated on: Aug 20, 2026
3 days ago
Leaving education, getting a job, buying a home and perhaps starting a family: the path previous generations followed may seem a distant dream to many now. But is it getting a bit easier - at least when it comes to getting on the housing ladder? Today's prospective first-time buyers may well feel
3 days ago
Nearly six months after US President Donald Trump vowed a swift victory over Iran, the conflict appears to be at a standstill, with prospects of a military victory or negotiated settlement growing dimmer. To break the deadlock, Trump has vowed an "economic D-Day" under which any country that does
3 days ago
Why US stocks fell today: Dow, S&P 500, Nasdaq drop as oil and bond yields rise US stocks fell as oil prices and Treasury yields rose. Dow, S&P 500 and Nasdaq dropped as Trump's Iran threat, Walmart and the bond market hit Wall Street. Published on: Aug 20, 2026
3 days ago
Crypto stocks surge as Trump backs Clarity Act: Coinbase, Circle, miners rise Crypto stocks surge as Trump backs the Clarity Act. Coinbase, Circle, Bitcoin miners and other crypto shares rise as investors expect clearer US crypto rules. Updated on: Aug 20, 2026
4 days ago
Stock Market Today, August 20: The domestic equity market snapped its seven-day losing streak and ended sharply higher on Thursday, August 20, as broad-based buying lifted sentiment across sectors after the US Treasury stepped in to contain the surge in global bond yields
4 days ago
The Reserve Bank of India RBI has accorded its approval to Life Insurance Corporation of India (LIC) for acquiring an aggregate holding of up to 9.99% of the paid-up share capital or voting rights in HDFC Bank Ltd., the bank said in a filing with the exchanges on Wednesday (August 19, 2026) night
4 days ago
Customers have shared their outrage after an app used by many businesses to track timesheets and produce invoices hiked bills by as much as 1500%, with one person calling it "daylight robbery". Richard Haldenby, head of UK consultancy firm Salentis
4 days ago
Bitcoin Price Today, August 20: Bitcoin surged to the $70,000 mark on Thursday, recording one of its sharpest gains in recent months as a combination of lower US Treasury yields, a weaker dollar, strong institutional demand and large-scale short liquidations pushed the broader cryptocurrency market
4 days ago
US President Donald Trump has said he will launch tougher economic measures against Iran, as well as any country and that helps or does business with the country. He wrote in all capital letters on Truth Social that he was launching "the most crushing economic operation ever taken against any
4 days ago
The domestic equity markets were trading firmly higher on Thursday, August 20, with buying visible across large-cap, mid-cap and small-cap stocks. The gains strengthened through the session, with the benchmark Sensex rising more than 600 points by 1:20 pm
4 days ago
U.S. President Donald Trump will host cryptocurrency executives at the White House on Wednesday as U.S. financial regulators this week prepare to advance their framework for certain digital assets. Trump, who has earned more than $1.4 billion from his family’s crypto ventures
4 days ago
Telecom inflation, chargers and the number 45, and Small Talk ASL app Beyond the regular noise, a closer look at personal technology. 20 August 2026. Published on: Aug 20, 2026, 08:00:58 IST By Vishal Mathur Prefer HTon Google Share via Copy link Opening thoughts. Josh Staub
4 days ago
