华利安：2023年业务发展公司(BDC)市场洞察报告（英文版）（20页）.pdf

1、Financial Services GroupBusiness Development CompaniesQ2 2023 INDUSTRY OVERVIEW AND COMMENTARYExecutive Summary 2Key Trends The recent volatility faced by regional banks has impacted traditional borrowing channels,especially for venture-backed companies.Private lenders are stepping in to fill the si

2、gnificant gaps left by banks.Overall M&A transaction activity is down,though lenders are finding Select opportunities to lend to existing borrowers.Credit quality for existing investments remains robust,as most portfolio companies have been able to pass along inflation impacts,some expanding margin.

3、If markets turn and we head into a recession,negative portfolio impacts may accelerate.The private credit market rolls on as lenders bask in rising interest rates,strong portfolio company performance,sufficient interest coverage,and increasing demand for their capital as regional banks pull back in

4、an attempt to survive.Banking Dislocation and Venture Opportunities Regional banks remain constrained due to deposit flight risk and deleveraging,attempting to preserve precious capital.Their absence is pushing more borrowers into private loan markets.The venture market has been completely upended f

5、ollowing the failures of Silicon Valley Bank and First Republic Bank.The effects are just beginning to play out and will be long-lasting.Many venture-backed firms are facing operating difficulties,a perfect storm combined with scarce investor interest and few exit paths for sponsors.Venture lenders

6、have been able to extract favorable terms,helping companies bridge the abyss.Firms that adapt and survive the next year or two will come out stronger.M&A Markets at an Inflection Point Though M&A activity continues to be anemic,transactions are picking up.Increasing opportunities through add-ons,tak