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Of the major substrategies, mezzanine funds led for five consecutive quarters until Q2 2024, when the strategy fell to third. Mezzanine trailed multistrategy (general debt) and direct lending, which posted one-year returns of 18.1% and 12.9%, respectively. The mezzanine return of 9.5% was well below its Q3 2023 peak of 33.4%. The TTM return for infrastructure & real estate debt declined from 8.7% to 6.8%, tied with distressed & special situations but lagging all other debt strategies. Distressed investors continue to face the same headwinds of lower headline default rates and a shrinking investable universe.
(Past performance is no guarantee of future results.)
Latest news
Q2'26 BDC analysis shows additional 184 bps of nonaccruals at cost
In a universe of 173 business development companies, or BDCs, Octus identified a total of $9.5 billion of debt (at cost) in nonaccrual status reported in the second quarter of 2026, a slight decline of 5% from $10 billion in the first quarter of 2026.
Reading the Board
The story changes depending on which numbers you’re counting.
Private Credit Defaults 101: Different Numbers, Different Stories
In Season 2 of Billions, Bobby Axelrod takes his lawyer Orrin Bach to an empty Yonkers racetrack in the dead of night.