BANKS FLED - BDCs TOOK OVER: Why Private Credit Exploded to $534B

Josef Pschorn interviews John Giordano (Seaport Global Co-Head Credit Research) on BDCs' 15-year explosion from $0 → $534B - and whether BlackRock TCP markdowns + Blue Owl 18% redemptions represent systemic risk.

Born from the Small Business Act, these tax pass-throughs exploded from $0 to $534B in 15 years as banks retreated.

The mechanics:

• 89% first-lien, 5.6x leverage targeting $200M EBITDA companies
• Perpetuals ($277B AUM): Monthly dividends, 5% quarterly gates—half the market
• PIK breakdown: 7.55% public vs 3.93% perpetuals. "Play with PIK... but pay the piper"
• Granularity protects: 50-60 loans = "death by 1K cuts," not blowups

Disclaimer: Fixed + Floating is for informational purposes only. Not investment, legal, or tax advice. Host/guest views are their own. Consult professionals before investing.

📌 Connect with us on ⁠LinkedIn⁠, ⁠Twitter/X⁠ and ⁠Substack⁠

Full analysis: ⁠Substack⁠

Recorded: 04.02.2026

#BDCs #PrivateCredit #PIK #BlueOwl #BlackRockBDC #CreditResearch #FixedIncome #SeaportGlobal #FixedFloating