Rowan says investors fund BDC investments by selling equities, making safer first-lien choice.
“people are not funding their investments in these BDCs with their treasury portfolio. They're selling their equities. Last I looked, first lien debt is senior to equity.”
Rowan says investors de-risked by selling equities for private credit, not by selling safe bonds.
“no one sold their treasuries or their investment grade bonds to buy private credit. Investors sold their equities. Investors made a logical decision to get equity like returns by owning first lien debt,”