How has BXSL performed compared to other business development companies (BDCs)?

• BXSL has consistently outperformed the S&P BDC Index and many large-cap BDCs in terms of total return since its public listing.
• Its credit quality and non-accrual rates remain among the best in the BDC universe, but its premium valuation poses a challenge for value seekers.
• Compared to peers like ARCC, FSK, and MAIN, BXSL’s risk-adjusted returns and dividend stability have set it apart, though sector concentration and sponsor dependency are worth watching.

When BXSL went public in October 2021, I admit, I was skeptical. The BDC space is crowded, and I’ve been burned before by glossy IPOs that fizzled. So I started tracking BXSL alongside established names like Ares Capital (ARCC), Main Street Capital (MAIN), and the S&P BDC Index. To make things practical, I set up a simple spreadsheet and plugged in total return data from Yahoo Finance, and cross-checked dividend history from company filings.

Here’s what stood out: from its public debut through early 2024, BXSL delivered a total return (including dividends) of roughly 30%, according to YCharts. Over the same period, ARCC managed about 17%, while the S&P BDC Index hovered around 15%. (You can check the numbers yourself on YCharts or Yahoo Finance.)

Source: YCharts, BXSL vs ARCC vs S&P BDC Index, 2021-2024

The performance gap is hard to ignore. And it’s not just price action—BXSL has paid a solid, steadily rising dividend, with special distributions sprinkled in (see Q4 2023). That’s something even MAIN, the “dividend darling,” struggled to match during some choppy quarters.

Performance isn’t just about price charts. I dug into BXSL’s non-accrual rates (loans that stopped paying interest) and leverage. According to its 2023 10-K (BXSL 2023 Annual Report), less than 0.2% of its portfolio at fair value was on non-accrual—one of the lowest in the industry. For comparison, ARCC and FSK both reported rates above 1% in the same period.

From a leverage perspective, BXSL plays it conservatively. Its debt-to-equity ratio is around 1.0x, below the sector median of 1.2x. That means less risk of forced asset sales if credit markets tighten. But—and this is key—it also means BXSL sometimes lags in bull markets, when more aggressive BDCs juice returns with higher leverage.

Here’s a case that caught my eye. In 2022, as rates started climbing, several BDCs saw a spike in non-accruals. BXSL, however, managed to sidestep much of the pain, thanks to its focus on senior secured loans and heavy due diligence—Blackstone’s credit team isn’t shy about walking away from risky deals. I remember joining an earnings call where Jonathan Bock (BXSL CEO) literally said, “Our underwriting discipline is our competitive moat.” You could almost hear the shade thrown at competitors who had to write down big chunks of their portfolio.

For example, FSK took significant markdowns in its portfolio due to exposure to a few troubled credits—something that barely registered in BXSL’s results. This was echoed in Reuters coverage of BDC quarterly earnings.

Data: Company 10-Ks, YCharts, BDC Investor Reports (2023)

BXSL, like other BDCs, operates under the Investment Company Act of 1940 in the US. The SEC mandates leverage caps (generally 2:1 asset coverage) and strict disclosure, which helps keep risk in check. You can review the primary regulation here: SEC Investment Company Act of 1940.

For those interested in international comparisons, European equivalents (like UK-listed investment trusts) have different leverage rules and less frequent reporting requirements, which can make direct performance comparisons tricky. This nuance matters if you’re looking to diversify globally.

Sources: SEC, ESMA, EU Directives

I asked a friend in private credit (let’s call him “Mike,” ex-Goldman, now at a mid-market direct lending fund) what he thought about BXSL. He laughed and said, “Blackstone’s credit machine is no joke. They get the first call on deals, and they’re ruthless on structure. But don’t forget—when everyone’s chasing the same deals, returns can compress fast.”

That’s the rub: BXSL’s edge comes from scale and access, but if credit spreads tighten, even the best BDCs are at risk of lower yields.

So, would I buy BXSL right now? Honestly, after tracking it for two years and watching how it handled both the 2022 rate shocks and the 2023 rally, I’m impressed. But I’m also wary of paying too high a premium—BXSL often trades above NAV, reflecting investor confidence but also raising the risk of a pullback if sentiment sours.

For anyone serious about BDC investing, I recommend:

• Watch for changes in non-accrual rates—these are the canary in the coal mine.
• Compare dividend coverage to peers quarterly (easy to do with free BDC trackers like bdcdata.com).
• Don’t get caught up in the “brand name” premium; weigh valuation relative to NAV and peers.

In sum, BXSL’s performance so far is hard to beat, but the BDC landscape is always shifting. Keep your eyes on the fundamentals, not just the Blackstone logo.

BXSL’s combination of strong historical returns, low non-accruals, and disciplined leverage makes it one of the most attractive BDCs for risk-conscious investors. However, the premium valuation means future returns may not match the past unless earnings growth keeps up. If you’re looking for a BDC with a fortress balance sheet and proven management, BXSL is near the top of the list—but don’t ignore the risks that come with popularity.

As for me, I’ll keep BXSL on my watchlist, add on dips, and always double-check the underlying numbers. If you want to dig deeper, check out the SEC’s EDGAR database for the latest filings. And as always, don’t just take my word for it—do your own homework.