The firm points to the expansion of business development companies as a key driver. Non-traded perpetual BDCs managed by publicly listed private credit firms had amassed about $128bn of net assets by Q1 2025. The six largest products accounted for roughly 72% of that total, underscoring the concentration of capital at the top end of the market. To remain fully invested, the managers of the four largest perpetual BDCs must deploy around $23bn annually on average, including leverage and net inflows. The largest single BDC is estimated to require about $43bn of annual deployment, equivalent to approximately 27% of total US middle-market direct lending issuance. Adams Street notes that this level of market share makes it increasingly difficult to maintain top-quartile returns. The report argues that deployment pressure intensifies further when insurance capital is included. Several publicly listed private credit managers now own or partner with life insurers whose general accounts...
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