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BDC Believers; Despite the dismal performance of business development companies, a few new offerings reflect a hope the model will survive.

Article Excerpt
Byline: Danielle Fugazy

In the unceasing credit cycle, when old institutions die, new ones soon emerge. While some of the major business development companies are seemingly dying a slow death, a few new players have already emerged to step into the void. The question deal pros are asking is whether the BDC business model is itself fading alongside the legacy institutions.

"Some of the old BDCs may never be able to lend again," cites one onlooker, an investor in the private equity space. "How do these new BDCs expect to gain the trust of the public when their counterparts are doing so poorly?"

The distress among BDCs has been well publicized. Allied Capital has been in sell off mode; American Capital Strategies will...

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