Researcher ORCID Identifier

0009-0006-2265-1797

Graduation Year

2025

Date of Submission

12-2024

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

George Batta

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2024 Russell Kuan

Abstract

This study examines the performance dynamics of public Business Development Companies (BDCs) – a unique and growing component of the private credit market that bridges public and private financing. Publicly traded BDCs provide critical capital to underserved middle-market firms, while giving investors access to private credit opportunities. Using a hand-pulled dataset derived from 10-K filings and supplemental sources, this research identifies the key financial and operational factors driving BDC performance, with a focus on senior secured loan allocations, portfolio yield, and leverage strategies. The findings reveal that portfolio yield and senior secured loan allocations are significant predictors of total returns based on Net Asset Value (NAV), underscoring the importance of portfolio composition and risk management in driving performance. These results provide actionable insights for investors targeting yield, managers optimizing operational efficiency, and policymakers crafting regulatory frameworks to foster sustainable growth in the BDC sector.

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