Jonathan Bock, Chief Financial Officer, Barings BDC discusses how advisors can incorporate a diversified private debt strategy into their portfolios and defines the key benefits of Business Development Companies (BDCs).
Historically, the global private credit asset class has delivered high yields with relatively low volatility. The increased regulatory pressure on banks coupled with a record number of private equity flows continues to drive financing opportunities for private lenders. Compared to traditional corporate bond markets, the private credit asset class typically benefits from an illiquidity premium, which translates to lower leverage and higher equity contributions. In today’s environment, an allocation to private credit offers protection from inflation, rising rates, and has the potential for enhanced income.
Business Development Companies or BDCs were created in order to help retail investors access private debt and private equity markets. Regulated under the Investment Company Act of 1940 and the SEC, BDCs make investments in small to mid-sized privately held businesses. Similarly to REITs, BDCs must distribute 90% of their earnings to investors.
Barings, a $371+ billion global investment manager, leverages its experienced, boots-on-the-ground investment team to navigate the global private debt market, delivering a highly diversified portfolio which seeks to find the best relative value across issuer, industry and currency. Barings, a subsidiary of MassMutual, specializes in sourcing differentiated opportunities across public and private fixed income markets, real estate and specialist markets.
To learn more, register & watch Barings’ presentation:
Private Markets Playbook: Private Credit
Friday, May 6, 2022 • 12:00pm ET
3 CFP / IWI / CFA CE credits
The Private Credit course aims to provide a practical playbook specifically for financial advisors. Join us for this 3 hour, interactive program which will cover topics such as:
- Maximizing Private Credit Access & Portfolio Benefits
- Trends, Opportunities, Risks & Asset Allocation Considerations
- BDCs, Direct Lending, Fixed, Alternative Income, Middle Market Opportunities & More
Jonathan Bock is Chief Financial Officer of Barings BDC, Inc. and a Managing Director in Barings Global Private Finance Group. Prior to joining Barings in July 2018, Mr. Bock was a Managing Director and Senior Equity Analyst at Wells Fargo Securities specializing in Business Development Companies (BDCs). He has actively followed the BDC space since 2006 and was the chief author of a leading BDC quarterly research publication: the BDC Scorecard. His research is often cited by The Wall Street Journal, Barron’s, and other prominent financial publications. Prior to Wells Fargo, Jonathan followed the specialty finance space at Stifel Nicolaus & Company and A.G. Edwards Inc. Prior to entering sell-side research in 2006, Jonathan was an equity portfolio manager/analyst at Busey Wealth Management in Champaign, Illinois. Jonathan holds a BS in finance from the University of Illinois College of Business and is a member of the CFA Institute.