Business Development Companies, or BDCs, have gone out of favor. The level of BDC attractiveness is nowhere close to where it was when interest rates started to rise. BDC (Roberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-Baltic capital markets. Other policy-level work include ...

Since mid-2024, when the Fed started to dial back its monetary tightening policy, the investor sentiment on BDCs ( BIZD ) changed. Many investors realized that lower base rates will inevitably damage BDC net investment income power, whichRoberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquid ...

Core Insights - The main risk for income investors is the challenge of finding high-yield investment opportunities with sound risk profiles in a difficult environment [1] Group 1: Industry Insights - Roberts Berzins has over a decade of experience in financial management, assisting top-tier corporates in shaping financial strategies and executing large-scale financings [2] - Significant efforts have been made to institutionalize the REIT framework in Latvia to enhance the liquidity of pan-Baltic capital markets [2] - Development of national SOE financing guidelines and frameworks for channeling private capital into affordable housing stock has been a focus [2] Group 2: Analyst Background - Roberts Berzins is a CFA Charterholder and holds an ESG investing certificate, with experience including an internship at the Chicago Board of Trade [2] - Active involvement in "thought-leadership" activities supports the development of pan-Baltic capital markets [2]

Group 1 - The Q3 earnings season is nearing its end, with most major BDCs having reported their financial results [1] - Roberts Berzins has over a decade of experience in financial management, focusing on corporate financial strategies and large-scale financings [1] - Berzins has contributed to the institutionalization of the REIT framework in Latvia to enhance liquidity in pan-Baltic capital markets [1] Group 2 - Berzins has been involved in developing national SOE financing guidelines and frameworks to channel private capital into affordable housing [1] - He holds a CFA Charter and an ESG investing certificate, and has experience with the Chicago Board of Trade [1] - Berzins actively participates in thought-leadership activities to support the development of pan-Baltic capital markets [1]

Financial Performance - For the quarter ended September 30, 2025, net investment income was $30.0 million, or $0.43 per share, compared to $28.7 million, or $0.40 per share for the previous quarter[6]. - Total investment income for the quarter was $61.3 million, an increase from $57.3 million in the prior quarter, driven by a shift to higher-yielding middle market loans[7]. - Net Investment Income for Q3 2025 decreased to $30,046,000 from $37,053,000 in Q3 2024, representing a decline of 19.4%[19]. - Basic and diluted net investment income per common share for Q3 2025 was $0.43, down from $0.52 in Q3 2024, a decrease of 17.3%[19]. - Net Increase in Net Assets Resulting from Operations for the nine months ended September 30, 2025, was $71,738,000, compared to $96,491,000 for the same period in 2024, a decrease of 25.7%[19]. - Interest income from non-controlled, non-affiliated investments increased to $58,898,000 in Q3 2025 from $57,541,000 in Q3 2024, a rise of 2.4%[19]. - Total Expenses for Q3 2025 were $31,327,000, up 13.0% from $27,562,000 in Q3 2024[19]. - Management fees for Q3 2025 were $5,583,000, an increase of 17.2% from $4,764,000 in Q3 2024[19]. Investment Portfolio - The investment portfolio at fair value increased to $2,255.5 million from $2,174.6 million as of June 30, 2025, reflecting a growth of approximately 3.7%[5]. - New private credit and equity co-investment commitments totaled $295.5 million, with net funded investments increasing by $200.1 million during the quarter[6][10]. - The weighted average yield on private middle market loans was 10.7%, slightly down from 10.9% in the previous quarter[10]. - The company focuses on first lien senior secured loans and aims to generate current income and capital appreciation[20]. Debt and Financing - The total debt outstanding at principal rose to $1,153.0 million from $1,054.0 million, resulting in a debt-to-equity ratio of 1.01x, up from 0.91x[5][14]. - The company completed a $200 million private placement of senior unsecured notes on October 15, 2025, to refinance debt and for general corporate purposes[17]. - The company had $322 million of undrawn commitments available on its credit facilities as of September 30, 2025[13]. Credit Quality - The non-accrual rate for debt investments improved to 1.4%, down from 1.6% in the previous quarter, indicating stable credit performance[4][10]. - Total net change in unrealized gains (losses) for Q3 2025 was $(4,983,000), compared to $503,000 in Q3 2024[19].

Core Viewpoint - Kayne Anderson BDC, Inc. has announced the promotion of Frank Karl to President and the appointment of Andy Wedderburn-Maxwell as Senior Vice President, indicating a strategic move to enhance leadership and expertise within the company [1][3][5]. Group 1: Leadership Changes - Frank Karl has been with Kayne Anderson since 2013 and has served as Senior Vice President since 2023, focusing on private credit strategies [2]. - Andy Wedderburn-Maxwell joined Kayne Anderson in April 2025 as Managing Director, bringing over 15 years of investment banking experience from firms like Citigroup and Wells Fargo [4]. Group 2: Strategic Importance - Frank Karl played a crucial role in the formation of Kayne Anderson BDC and was instrumental in leading the IPO process and a recent strategic investment into SG Credit [3]. - The leadership believes that Andy's industry perspective and strategic insight will significantly benefit the growth of the private credit platform [5]. Group 3: Company Overview - Kayne Anderson BDC, Inc. is a business development company that primarily invests in first lien senior secured loans, with a secondary focus on unitranche and split-lien loans to middle market companies [6]. - The company is externally managed by KA Credit Advisors, LLC, a subsidiary of Kayne Anderson Capital Advisors, L.P., and aims to generate current income and capital appreciation [6].

Investment Portfolio - As of September 30, 2025, the company had investments in 108 portfolio companies with an aggregate fair value of approximately $2,256 million and unfunded commitments of $277 million[261]. - The portfolio consisted of 93.7% first lien senior secured loans, 4.6% subordinated debt, and 1.7% equity investments[261]. - For the three months ended September 30, 2025, gross new investment commitments were $295.5 million, compared to $182.6 million for the same period in 2024, representing a 62% increase[271]. - The weighted average yield for private middle market loans was 10.7% based on fair value as of September 30, 2025[263]. - The average position size based on total investment commitments was $23.8 million as of September 30, 2025[265]. - The fair value of debt investments as of September 30, 2025, was $74.3 million, with 3.4% on the watch list, compared to $69.4 million and 3.5% on the watch list as of December 31, 2024[275]. - As of September 30, 2025, there were five debt investments on non-accrual status, up from two in the same period of 2024[279]. - The largest contributor to unrealized gains for the three months ended September 30, 2025, was SGCP Intermediate, Inc. (SG Credit) with $1.9 million[284]. - The top contributor to unrealized gains for the nine months ended September 30, 2025, was Arborworks Acquisition, LLC, with gains of $3.9 million[287]. Financial Performance - Total investment income for the three months ended September 30, 2025, was $61.3 million, an increase from $57.8 million in the same period of 2024, representing a growth of 6.1%[277]. - Net investment income for the three months ended September 30, 2025, was $30.0 million, down from $37.1 million in 2024, reflecting a decrease of 19.1%[278]. - Operating expenses for the three months ended September 30, 2025, totaled $31.3 million, compared to $20.7 million in 2024, indicating an increase of 51.5%[280]. - The company had a net increase in net assets resulting from operations of $24.6 million for the three months ended September 30, 2025, down from $37.6 million in 2024, a decrease of 34.6%[278]. - Unrealized losses on investments for the three months ended September 30, 2025, were $(14.3) million, compared to $(7.5) million in 2024, showing an increase in losses of 90.7%[282]. - PIK interest included in interest income for the three months ended September 30, 2025, was $2.1 million, compared to $1.5 million in 2024, an increase of 40.0%[279]. Debt and Financing - The company completed a private placement offering of $200 million of senior unsecured notes on October 15, 2025, with net proceeds used to refinance existing debt and for general corporate purposes[255]. - As of September 30, 2025, the company had $75 million in senior unsecured notes outstanding, with $25 million of 8.65% Series A Notes due June 2027 and $50 million of 8.74% Series B Notes due June 2028[292]. - As of September 30, 2025, the company had $1,078 million borrowed under credit facilities and cash and cash equivalents of $46.1 million[291]. - The asset coverage ratios as of September 30, 2025, and December 31, 2024, were 199% and 238%, respectively, indicating strong compliance with the 150% coverage requirement[289]. - The company has $322 million of undrawn commitments available on its credit facilities as of September 30, 2025[291]. - Total contractual obligations amount to $1,153 million, with $301 million due from the Corporate Credit Facility and $570 million from the Revolving Funding Facility[298]. Interest Rate Sensitivity - As of September 30, 2025, 96% of the company's debt investments had floating interest rates[263]. - Interest rate sensitivity may affect net investment income due to the difference between investment and borrowing rates[316]. - The company experienced a decrease in net interest income due to changes in interest rates, with a decline of $42.1 million when rates decreased by 200 basis points[318]. - When interest rates decreased by 100 basis points, net interest income fell by $21.1 million[318]. - Conversely, an increase of 100 basis points in interest rates would result in a net interest income increase of $21.1 million[318]. - The company may utilize standard hedging instruments such as futures, options, and forward contracts to mitigate interest rate fluctuations[319]. - Hedging activities may protect the company from adverse interest rate changes but could also limit benefits from lower interest rates on fixed-rate investments[319]. Corporate Governance and Fees - The base management fee under the Amended Investment Advisory Agreement is calculated at an annual rate of 1.00%[309]. - The incentive fee on income is subject to a twelve-quarter lookback hurdle rate of 1.50%[309]. Market Risks - The company is subject to financial market risks, including valuation risk and interest rate risk[314]. - The company expects a significant majority of its investments to be classified as Level 3 investments, which require fair value determination[303].

Group 1 - Kayne Anderson BDC, Inc. (NYSE: KBDC) has been identified as a top first-lien focused BDC pick for an extended period [1] - The article highlights the experience of Roberts Berzins in financial management and his contributions to the development of capital markets in Latvia [1] - Berzins has been involved in institutionalizing REIT frameworks and developing national SOE financing guidelines [1] Group 2 - The article does not provide any specific financial data or performance metrics related to KBDC or the broader industry [2][3]

Group 1 - Business Development Companies (BDCs) are financial vehicles that aim to source capital at low costs and lend it at higher yields to businesses that cannot access traditional banking services [1] Group 2 - Roberts Berzins has over a decade of experience in financial management, focusing on helping corporates with financial strategies and large-scale financings [2] - He has contributed to institutionalizing the REIT framework in Latvia to enhance liquidity in pan-Baltic capital markets [2] - His work includes developing national SOE financing guidelines and frameworks for channeling private capital into affordable housing [2]

Group 1 - The article discusses the methods for determining fair valuations, specifically mentioning discounted cash flow models and multiples approach as common techniques [1] - It highlights the experience of Roberts Berzins in financial management, particularly in shaping financial strategies for top-tier corporates and executing large-scale financings [1] - The article notes Berzins' contributions to institutionalizing the REIT framework in Latvia to enhance the liquidity of pan-Baltic capital markets [1] Group 2 - It mentions Berzins' involvement in developing national SOE financing guidelines and frameworks aimed at channeling private capital into affordable housing [1] - The article states that Berzins holds a CFA Charter and an ESG investing certificate, indicating his qualifications in the field [1] - It also references his internship experience at the Chicago Board of Trade, despite being based in Latvia, showcasing his international exposure [1]