In the last five years, several large-scale, publicly traded alternative asset management firms have entered the direct lending market. Together, they launched six business development companies (BDCs) and raised $141 billion in capital, outpacing the $126 billion raised over the past 20 years.
These firms are designed to “go big” (targeting borrowers with over $200 million Earnings Before Interest, Taxes, Depreciation, and Amortization [EBITDA]) and are compelled by public shareholders to grow assets under management (AUM) quarter after quarter.
As they push further into the large-market lending space, the boundaries between private direct lending and the public syndicated loan market have begun to blur.
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