John Cole Scott: Washed-Out Or Broken? Why This BDC Selloff Looks More Like An Entry Point

CEF Advisors, 03/22/2026

How 14% yields, 20% discounts, real ROE and rare "oversold" technicals are setting up a multi-year opportunity in listed BDCs Listed BDCs have taken a hit from lower base rates, AI-driven software fears and headline stress in non-traded private credit, pushing discounts and sentiment to late-cycle extremes. Our work at CEF Advisors across expenses, leverage costs, credit marks, PIK quality, realized gains/losses and multi-year NAV total return says the picture is mixed, but far from "game over" for the model. We think prices already discount a large share of what a regular recession would do to earnings, while permanent-capital structures are positioned to benefit from wider spreads and semi-liquid peers tapping the brakes. For investors who diversify across 6-12 stronger platforms and monitor them actively, we believe this is an excellent time to add selectively to listed BDC exposure for a 3-to-5-year time horizon rather than retreat from the asset class.