Financial Services >> Analyst Interviews >> March 20, 2026
Key Takeaway: Despite the Fed cutting rates by 175 basis points, BDCs maintain ROEs above 8%, though many trade at 78% of book value, pricing in recession-level losses. Mitchel Penn highlights ARCC, GBDC, and OBDC as top picks due to attractive valuations and strong historical performance. While software exposure — pegged at 40% for TSLX — raises AI-related credit concerns, Penn notes that the industry remains well-capitalized with leverage safely below 1.3x. Investors should prioritize five-year average ROE as the primary predictor of future price-to-book value. Profile
Mitchel Penn, CFA, is Managing Director and Senior Analyst covering business development companies for Oppenheimer & Co. Inc. Prior to joining Oppenheimer, he followed business development companies at Janney Montgomery Scott. In addition, he was an Equity Portfolio Manager/Financial Analyst at Legg Mason Capital Management from 2001 to 2012 where he specialized in financial companies. Prior to this, he managed fixed income portfolios at Legg Mason Capital Management and Aetna. He began his career as an accountant at Price Waterhouse in 1981. Mr. Penn is a member of the Baltimore CFA Society and has served as president and also on the board of directors. He holds a B.A. from Villanova University and an MBA from the University of Chicago. Profile
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TWST: Thanks so much for joining us today. To begin, I would like to ask, how have the market and economy performed in 2026 versus your predictions thus far? Have you had
