Matt Levine’s Money Stuff: KKR Buys Back Some Private Credit

FS KKR

The situation with business development companies is that their market value is less than their net asset value. A BDC is basically a retail private credit fund; it has a portfolio of loans, it marks them to market every quarter, and it computes a net asset value per share. “Our portfolio is worth $20 per share” or whatever, it tells investors. And then:

• If it’s a publicly traded BDC, its stock trades at $17 or $13 or $10 on the stock exchange: Most public BDCs’ stocks trade at a discount to their NAV.
• If it’s a non-traded BDC, its stock ...