Bloomberg has launched a new index that brightens the light that is bringing transparency to often opaque private markets, this time with a focus on one of the sector’s more specialised corners.
The New York-based data behemoth’s US BDC Aggregate Eligible Index (Ticker: BDCUSAGG) gives investors a unique view into how bonds issued by the burgeoning Business Development Company (BDC) sector perform across risk and return metrics.
BDCs are publicly traded investment vehicles that aggregate private credit deals to provide capital to small and mid-sized US companies. This index launch is particularly timely as the debt issued by BDCs has emerged as a distinct and growing segment of the bond market given its yield, diversification and transparency advantages.“They are one of the very few transparent investment vehicles out there in the market where you can, due to regulatory requirements, understand what they hold,” Mark Phillips, Global Head of Private Credit at Bloomberg, told Data Management Insight.
Novel Exposure
The BDC Index is a carve-out of Bloomberg’s flagship US Aggregate Bond Index, a gold-standard benchmark that measures investment-grade debt. To be included in the BDC Index, a bond must meet the eligibility requirements of the broader gauge. For example, having a minimum amount outstanding of $300 million with at least a year to maturity. Bloomberg further applies its proprietary Bloomberg Industrial Classification System (BICS) to isolate issuers specifically classified as BDCs.
The result is a concentrated, yet liquid segment of that market comprised of 33 BDC managers, including giants like Blackstone and Ares, and 117 individual bonds, all with a market value of about $65 billion.
New Trend
The creation of Bloomberg’s BDC Index is in response to a massive allocation shift among institutional investors that has seen them move more capital to private markets. A decade ago, an insurance company might have allocated 5 per cent to private markets; today, that figure is often 20 per cent to 30 per cent.
As these private market allocations grow, so does the need for professional-grade benchmarking, said Jasvinder Singh, Senior Fixed Income Index Product Manager for Bloomberg Indices. Even for clients who are 90 per cent in public assets and 10 per cent in private credit, having a benchmark from a provider like Bloomberg helps in “earning credibility” with their own end-users, Singh told Data Management Insight.
The primary goal of the index is to provide a benchmark for a sector that has grown “exponentially” since the Global Financial Crisis. The performance data justifies the sudden surge of interest. Since its inception in January 2022, the index has delivered a cumulative total return of 14.32%, whereas the base US Aggregate Index returned near zero over the same period.
By tracking these liabilities, Bloomberg enables investors to “analyse performance of the BDC’s debt” and “look at the credit curves and the funding costs of each one of the BDCs,” said Philips. This can provide an “indication of sentiment towards private credit through a BDC debt issuance lens”.
This is an important window since private credit is filling a vacuum left by traditional lenders. Following the regional banking crisis, the private direct lending market has swelled to roughly $2 trillion with BDCs’ AUM valued at around $450bn in 2025, according to Bloomberg Intelligence.
“Private credit is no longer seen as a niche asset class. It is very much well converged with a lot of public credit,” Philips said.
Going Deeper
While the BDC Index provides insight into how private credit lenders access and price public capital, investors can glean additional insights into direct lending market activity with Bloomberg’s direct lending market monitor DLEN GO. This function captures BDC holdings data alongside deals sourced through M&A disclosures, Bloomberg News and direct lender submissions, resulting in an aggregated view of private credit deal flow.
Bloomberg has been able to seize on this growing part of the market through the unique characteristics of BDCs. The vehicles are registered under the US Investment Company Act of 1940, meaning they are subject to rigorous public disclosure requirements of information on their holdings. For example, data on the underlying loans is contained in 10K and 10Q disclosures made by the BDCs to the Securities and Exchange Commission (SEC).These regulatory requirements placed upon BDCs make it possible to apply Bloomberg’s arsenal of data processing capabilities to extract the information necessary for investors to assess the market. Even so, with that data tied into reports, Bloomberg uses table-based extraction and human quality control processes to convert that unstructured data into information that investors can readily ingest into their systems.
“To bring it all together, you can use the index for liability performance analysis, and you can use our holdings analytics plus market monitoring tools like DLEN to understand what BDCs are originating and what they’re investing in,” Philips said.
End-to-End Workflow
The BDC Index and DLEN are part of a broad strategic plan that has seen Bloomberg invest heavily to ensure its Terminal remains the central hub for both public and private asset management.
It’s an end-to-end strategy aligned to public credit markets that seeks to offer “our clients the ability to originate, diligence, invest in, portfolio manage, value, risk, benchmark, all the way through the investment lifecycle,” said Phillips.
Bloomberg hopes that by integrating private investments into the same operating model used for public markets, it can reduce the need for disparate systems. It has already expanded its Leveraged Loan index suite to include European and Global versions, as well as over 150 sub-indices, and is eyeing a future index that looks at the “asset side” of BDCs—the actual loans they originate—rather than just the bonds they issue.
With the continued convergence of public and private markets, and as the technology for index production continues to evolve, Singh said that more innovations are on the horizon.
“We could practically tap into different data points on the Terminal to potentially launch an index, as we get ready with data and pricing.”
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