John Cole Scott on BDCs, how they stack up to closed-end funds and more
Release Date: 02/28/2025
Trinity's Brown: Near-shoring, interest rates and more are boons for private credit
The NAVigator
Kyle Brown, chief executive officer at , sees the private-credit boom continuing, in part fueled by government efforts to generate business gains in the United States. That has created a new wave of capital expenditures — and a 20 percent year-to-date increase in demand for private credit — that is likely to power the private lenders for the foreseeable future. For Trinity, the company has doubled in size in roughly three years, but the current demand gives it room to grow further, and Brown says he believes business-development companies can handle the heightened demand without a...
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Allspring's Schueller says this 'muddle-through economy' is good for junk bonds
The NAVigator
Mike Schueller, Co-Manager of the , says that high-yield bonds are poised to be steady performers through the current wave of headline risks and market uncertainty because the economy is solid enough that there's no reason to expect a spike in defaults. With the potential for recession "having receded into the background," he's expecting a "muddle-through economy," with defaults remaining at current low levels, allowing high-yield to keep delivering "high, consistent income" and total returns at or above historic norms for the high-yield asset class.
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Your questions answered with John Cole Scott of Closed-End Fund Advisors
The NAVigator
John Cole Scott, President of — the Chairman of the — answers listener questions about whether premiums and returns of capital are as bad for investors as they are often cracked up to be, on whether interval funds are worth the illiquidity risk and if the reasons why individuals buy closed-end funds means they are better used as short-term investment tools. Plus, our host asks a question that came up for him as he watched the AICA chairman on the stage at the group's recent Business Development Company Forum in New York.
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Bonus NAVigator: Gladstone's Bob Marcotte at the AICA BDC Forum
The NAVigator
Bob Marcotte, President at , says that government policies which encourage business investment and capital expenditures are creating outstanding conditions for the private credit market. In an interview at the in New York City, Marcotte said that Gladstone is "very bullish" on the likely capital-expenditure cycle being spurred by tariff and near-shoring policies, but the veteran money manager also noted that BDCs have never been more competitive with the public markets, thans to rapid expansion in recent years, moving the industry to a point where "there's so much money in the private market...
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Bonus NAVigator: Oppenheimer's Penn is watching how credit losses weigh on BDCs
The NAVigator
Mitchel Penn, Managing Director at — interviewed at the in New York on Wednesday — says that credit losses for business development companies during the first quarter of 2025 were more than double the level they have been at for the last few years. Penn says some of that increase could be attributed to the market's reaction to government policies, but that it also could be that interest rates have stayed higher for so long now that they are starting to create credit-quality issues. He said BDCs can still deliver returns in the range of 9% moving forward, though he warned that an...
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How a BDC industry advocate shapes policies in Washington
The NAVigator
Tonnie Wybensinger, Head of Government Relations for the — interviewed at the AICA BDC Forum in New York on June 11 — discusses the role that lobbyists play in the legislative process and how current efforts to improve the tax treatment of business-development companies, as well as to level the playing field with mutual funds when calculating expense ratios for fund-of-funds. Those efforts — which have been ongoing for years — could soon be coming to a head, with the BDC tax-parity legislation included in the "One Big Beautiful Bill" currently winding through Congress.
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Calamos' Grant on getting equity-like returns without market correlation
The NAVigator
Michael Grant, Co-Chief Investment Officer at — Co-Manager of the Calamos Long/Short Equity & Dynamic Income Trust — says that current market conditions have made it that bonds are no longer a natural working hedge for equities downturns, and the downside risk in terms of capital return can be greater in the bond market than in stocks. He notes that investors are over-exposed to Magnificent Seven and the biggest of the large-cap stocks — noting that the typical client has about 40 percent of their equity assets there — and they need to diversify away from those positions to be...
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John Cole Scott on whether "the best funds" live up to their billing
The NAVigator
John Cole Scott, president of — the chairman of the — discusses two mainstream media articles that purported to name "the best closed-end funds" and that were published right around the times when he appeared on The NAVigator and gave out his own investment suggestions; he to compare how all of the suggestions turned out and see how one-size-fits-all advice actually suits individual investors. It's a lesson in evaluating funds, but also on sizing up the sources of investment recommendations.
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Nuveen's Griggs: In turbulent markets, small portfolio tweaks have big impacts
The NAVigator
Brian Griggs, head of portfolio strategy and solutions at , says that investors have long had too much dependence on large-cap domestic stocks and an over-reliance on duration in fixed-income allocations, and he says that investors should address those pain points today to address macro-sensitivity caused by today's headlines. Using Nuveen's Nsights anaytical tool — a proprietary system that examines how portfolio changes impact future portfolio performance — Griggs says that investors want to address their portfolio problems now, including holding too much cash, to make portfolios better...
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CION's Gatto on how private markets have weathered tumultuous markets
The NAVigator
Mark Gatto, co-founder and co-chief executive officer at , says that private investments have been weathering current storms better than public companies because illiquidity translates to stability in times when the market is volatile. Gatto says these markets have highlighted what private investments do well, which should boost their attractiveness moving forward, with heightened demand leading to better pricing as more investors see how well the private sector's valuations have held up while the stock market dropped into bear market territory and then rebounded.
info_outlineJohn Cole Scott, Chief Investment Officer at Closed-End Fund Advisors — the Chairman of the Active Investment Company Alliance — returns to The NAVigator in an ongoing project to answer audience questions, this week diving into the world of business-development companies. He sorts out the differences between BDCs and closed-end funds, explaining why some investors — himself included — analyze BDCs like a closed-end fund rather than a stock, but then digs into his firm's data to show what to look for to find "safe" business-development companies, and how bad things could get if a BDC encounters trouble.