Cox Capital Liquidity Offer Fails to Attract BDC Investors

Cox Capital Partners attempted to provide liquidity to investors in non-traded business development companies by offering to purchase shares at an average 26% discount. The bid targeted funds managed by Apollo Global Management, Ares Management, Blue Owl Capital, and HPS Investment Partners.

Despite a redemption backlog of nearly $15 billion across private credit funds, the offer saw minimal interest, drawing less than $5 million in orders. The lack of participation indicates that investors prefer to wait for redemptions at net asset value rather than accept immediate double-digit losses, even as Fitch Ratings reported that US private credit default rates reached record highs in April.

Following the poor response, Cox Capital plans to expand its liquidity strategy to target interval funds managed by Variant Investments and Cliffwater LLC.