What’s Behind the BDC Boom?

The interest that private equity firms have shown in pursuing credit strategies is not confined to the mega-firms. Christian Oberbeck, Managing Partner at middle-market buyout veteran Saratoga Partners, discusses his firm’s strategy with affiliate Saratoga Investment Corp., a publicly traded business development corporation (BDC) that provides debt financing to private companies.

In an in-depth conversation, Oberbeck explains the appeal of credit as a strategy and the BDC as a “perpetual instrument” for participating in the credit market. He discusses potential conflicts of interest between the buyout business and lending, the appeal of SBIC status, and he analyzes what went wrong – and ultimately right – in the near-death experiences of BDCs like American Capital and Allied Capital in the wake of the financial crisis.