said requests increased at 10 of the 16 non-traded BDCs it tracks in the second quarter, averaging 10.3% of shares outstanding. Because these funds typically cap quarterly repurchases at 5% of NAV, investors often get prorated, which nudges people who want out faster toward the secondary market. And once an external “exit price” keeps printing below stated values, boards, auditors, and distributors can find it harder to defend smooth valuations – even if the underlying loans haven’t changed much.
Why should I care?
For markets: Apollo at 70 cents on the dollar can turn into the market’s new yardstick.
Tender prices at 70-85 cents versus May-end NAVs don’t just affect the sellers taking the haircut. They can become a reference point for how platforms, advisors, and allocators think about what these portfolios are really worth in a hurry. If discounts persist, managers may feel pressure to mark portfolios more conservatively, which can slow reported NAV growth and make new fundraising tougher for groups like Apollo, Ares Capital, and BlackRock’s HPS. The big shift is psychological and practical: once investors start treating secondary pricing as the “real” exit value, the perceived cost of liquidity rises for the whole non-traded BDC wrapper.