If I Had To Retire With 2 BDCs, These Would Be My Picks

Roberts Berzins, CFA13.7K FollowersFollow5ShareSavePlay(10min)Comments(10)SummaryThe BDC sector faces mounting risks: falling base rates, spread compression, and rising credit issues, driving a ~23% index drawdown in 12 months.Dividend cuts have accelerated, with 12 out of ~55 BDCs—including GBDC and GLAD—reducing payouts in the past year.Sector-wide average base dividend coverage sits at 100%, with fully leveraged balance sheets and no margin of safety.All of this might contribute to an argument that BDCs have nothing to do with retirement investing.Yet, in the article, I share 2 BDC picks, which I view as durable retirement investments (also, both of these I would choose if I was forced to make only 2 bets). malerapaso/iStock via Getty Images It seems that the risks for the BDC sector (BIZD) just keep emerging one after another. In the space of less than 2 years, the sector has been pressured by falling base rates, compressing spreads, stagnant M&A markets, enormousThis article was written byRoberts Berzins, CFA13.7K FollowersFollowRoberts Berzins has over a decade of experience in the financial management helping top-tier corporates shape their financial strategies and execute large-scale financings. He has also made significant efforts to institutionalize REIT framework in Latvia to boost the liquidity of pan-Baltic capital markets. Other policy-level work includes the development of national SOE financing guidelines and framework for channeling private capital into affordable housing stock. Roberts is a CFA Charterholder, ESG investing certificate holder, has had an internship in Chicago board of trade (albeit, being resident and living in Latvia), and is actively involved in "thought-leadership" activities to support the development of pan-Baltic capital markets.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.