It’s becoming more common for money managers to hire investigators to look into the firms they’re investing in or lending to, reported Laura Benitez and Silas Brown for Bloomberg.
As private credit has tripled in size over the last decade, to $1.7 trillion, firms have become more likely to inquire into the true value of the debt they are investing in.
Bloomberg News reported in February that in some cases, the same loans were being marked notably differently depending on whose portfolio they were in.
As business development companies (BDCs) — publicly traded funds that invest in small and medium-sized private companies — have become more popular, more large funds have put effort into figuring out the accuracy of valuations.
Benitez and Brown note that there is a market that is shorting BDCs
