Asset Class: Business Development Companies (BDCs)

Asset Class: Business Development Companies (BDCs) Assets Reviewed: GSBD– Goldman Sachs BDC BCSF – Bain Capital Specialty Finance GBDC – Golub Capital BDC

Resources:

BDCs Risk Assessment Forum discussion

What Are BDCs? BDCs are publicly traded vehicles that invest in debt or equity of small- to mid-sized private U.S. businesses, earning high yields in return. They offer retail investors access to private credit–like strategies but with daily liquidity. However, they carry volatility and credit risks, especially during market stress.

Analyst Recommendation: ❌ Do Not Add to Noon's basket of deployment strategies but continue to monitor. Our analysts do not recommend adding BDCs to Noon’s basket of deployment strategies at this time, for the following reasons:

• Too volatile for Noon’s needs: BDCs are public-market instruments and their price swings are incompatible with USN’s stablecoin model.
• Returns are unpredictable: While high, BDC yields aren’t guaranteed and carry significant drawdown risk.
• Portfolio opacity: Limited visibility into underlying assets makes it difficult to assess risk in real time.

However, this decision is not ours alone. It is yours too. Hence, the vote to integrate BDCs or not will be open for the next two weeks to gather everyone's opinion. Once the vote will be concluded, we will take action per the results.

BDCs remain compelling in principle. We recommend continued monitoring for future strategies that might enable lower-volatility exposure to this space.