BDC Weekly Review: Sector ROE Is Too Low, Says Sixth Street Specialty Lending

Jun. 06, 2025 10:56 PM ETTSLX, ARCC7 Comments
(8min)

Summary

  • We take a look at the action in business development companies through the last week of May and highlight some of the key themes we are watching.
  • BDCs posted strong returns in May.
  • TSLX's claims of low sector ROEs are overstated; sector averages mask significant outperformance by select BDCs and better portfolio yields.
  • We have trimmed some BDC positions after the rebound, expecting more volatility and better entry points in the near future.
  • I do much more than just articles at Systematic Income: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »

Batteries and warning signs, low battery warning, 3d rendering.

Tingting Ji

Welcome to another installment of our BDC Market Weekly Review, where we discuss market activity in the Business Development Company [BDC] sector from both the bottom-up–highlighting individual news and events – as well as the top-down – providing an overview of the broader market.

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This article was written by

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ADS Analytics is a team of analysts with experience in research and trading departments at several industry-leading global investment banks. They focus on generating income ideas from a range of security types including: CEFs, ETFs and mutual funds, BDCs as well as individual preferred stocks and baby bonds.

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