Michael Gross believes there is a "diseconomy of scale" in asset management, where firms targeting $1 trillion or $2 trillion in assets focus on accumulation over investment performance.

Software loans, which represent 20% to 30% of some private credit portfolios, still have significant downside risk.

The negative ROEs reported by some BDCs were caused by their Net Asset Values being written down to reflect the mark-to-market of their software loans.

For the first time in 10 to 15 years, Business Development Companies (BDCs) have reported negative Return on Equity (ROE) for a quarter.

SLR Capital Partners reported a 7% Return on Equity for the quarter, making it one of only four or five public BDCs with a positive ROE.

The proliferation of non-traded BDCs resulted in too much capital being raised too quickly, leading some managers to lose investment discipline.

SLR Capital Partners recently lowered its dividend to align with its current earnings power, a decision not driven by credit losses.

SLR Capital Partners has only 2% exposure to software loans in its portfolio.

In the most recent quarter, SLR Capital Partners' Net Asset Value declined by 50 basis points, outperforming peers whose NAVs fell by 200 to 1000 basis points.