Evolving Trends in Business Development Companies (BDCs) in the U.S. Direct Lending Market

Tomohiro Okubo, Yutaro Kaido, Kenta Yamamoto and Kazuaki Washimi
Additional contact information
Tomohiro Okubo: Bank of Japan
Yutaro Kaido: Bank of Japan
Kenta Yamamoto: Bank of Japan
Kazuaki Washimi: Bank of Japan

No 26-E-1, Bank of Japan Review Series from Bank of Japan

Abstract: In recent years, private credit has attracted growing attention as a form of financial intermediation by the NBFIs that mainly involves lending to unlisted firms. In particular, direct lending has been expanding, which provides loans to medium-sized firms and small firms, including through investment vehicles known as BDCs. BDCs are a U.S.-specific type of investment company and are considered relatively transparent due to mandatory quarterly disclosure requirements. At the same time, BDCs have a distinct liability structure compared to other direct lending funds (PD funds), as they raise capital from retail investors. This paper outlines trends and risks in the direct lending market, focusing on BDCs. Amid increasing linkages between Japanese banks and domestic institutional investors with BDCs and PD funds through investments and loans, the environment surrounding private credit markets could impact Japan's financial system. Close monitoring remains necessary.

Keywords: non-bank financial institutions; financial intermediation; government policy and regulation (search for similar items in EconPapers)
JEL-codes: G15 G23 G28 (search for similar items in EconPapers)
Date: 2026-04-21
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.boj.or.jp/en/research/wps_rev/rev_2026/data/rev26e01.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:boj:bojrev:rev26e01

Access Statistics for this paper

More papers in Bank of Japan Review Series from Bank of Japan Contact information at EDIRC.
Bibliographic data for series maintained by Bank of Japan ().