Private credit nears 2020-level slump
Mint New Delhi
|December 30, 2025
Business development firms are set for their worst year relative to the S&P 500 since 2020, leading some investors to question their future in the $1.7 trillion private credit market.
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The Cliffwater BDC Index, which tracks 41 vehicles that house direct loans, is down about 6.6% this year through Dec. 2204, versus the S&P 500’s roughly 18.1% gain, according to data compiled by Bloomberg. In 2023 and 2024, the BDC index gained about 25.4% and 4.1%, respectively.
The vehicles have been pummeled by a storm of rate cuts, market blowups and risingsigns that the market is set to experience more stress. A lack of deals this year forced private lenders to shrink margins on loans, diminishing how much they can earn.
“There's a level of skepticism from our clients around the very large broadly distributed vehicles, if they will be able to maintain the returns that they've had before,” said Matt Malone, head of investment management at Opto Investments, a private markets platform for wealth managers.
This story is from the December 30, 2025 edition of Mint New Delhi.
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