Private credit selloff creates BDC disconnect
The guest argued that the market selloff in Business Development Companies (BDCs) to a 20% discount to NAV represents an irrational disconnect from actual default realities.
The argument
Jan VanEck noted that a 20% discount on 2x leveraged BDCs implies a 10% default rate, whereas high-yield defaults are only around 2.5% and the US economy remains strong. He highlighted Blue Owl Capital (OWL) as an attractive, growing business with a high dividend yield that has been unfairly punished.
The thesis, stress-tested
✓ What validates it
- ✓BDC discounts to NAV narrowing toward historical averages
- ✓High-yield default rates remaining stable near 2.5%
▸ Risks discussed
- ▸Systemic credit issues or hidden 'cockroaches' in private lending
- ▸Stale quarterly NAV calculations masking real-time asset deterioration
Hear it yourself
"In this conversation, we talk about Bitcoin, gold, the rise of ETFs, why Jan has so much conviction in the country of India, how he thinks about making long term strategic bets, and then we get into what is in his personal portfolio, where his convictions are, how he's navigating the macro environment, and what he thinks you should know as an investor, and how you should change your capital allocation strategy based on what's he seeing in the world. Here's my latest conversation with Jan Van Eck. Alright, Jan. Private credit has been a huge issue. People are very worried about it. Are you worried, or what do you think is going on? You went right into my favorite topic."
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