Private Credit BDCs Hold Steady as Top Managers Deliver 9%–13% TTM Returns
Connect Money Semi-Liquid Monitor: Q4 2025
The Connect Money monitor analyzes Q4 2025 data from Blue Vault Partners, covering non-traded Business Development Companies (BDCs), non-traded REITs, and interval funds. The data set contains 113 Q4 2025 records: 24 BDCs, 43 REITs, and 46 interval funds.
Overview
Semi-liquid funds entered year-end with a familiar story: income is still doing most of the work, but the sources of that income are becoming more differentiated. BDCs and private-credit interval funds continue to offer the headline distribution rates that advisors can discuss with income-oriented clients, yet the data shows that payout quality matters as much as payout size. Several high-distribution products also sit well above the universe average, making coverage ratios, realized return history, and liquidity management essential context.
Data Highlights
Income positioning remains the defining feature of the semi-liquid universe. BDCs averaged an 8.9% distribution rate in Q4 2025, interval funds averaged 8.6%, and REITs averaged 4.6%.
The five highest Q4 2025 distribution rates came from interval funds, led by Alternative Strategies Income Fund at 28.0%, Franklin BSP Private Credit Fund at 17.3%, City National Rochdale Strategic Credit Fund at 15.7%, Flat Rock Opportunity Fund at 15.7%, and StepStone Private Credit Income Fund at 14.3%.
The BDC dashboard is broadly constructive but not uniform. Among the top five BDCs by NAV, four of five had Q4 distribution rates between 7.1% and 9.4%, while PGIM Private Credit Fund stood out with an 11.6% distribution rate and 13.0% trailing twelve months (TTM) return.
REITs showed the clearest year-over-year total-return repair. Average REIT TTM return rose to 3.5% in Q4 2025 from 1.3% in Q4 2024, while the average REIT distribution rate moved to 4.6% to 4.0%.
Top Five Q4 2025 NAV Rankings
The NAV ranking is led by interval fund KKR Asset-Based Income Fund, whose reported NAV value of 1,016.52 is far above the rest of the Q4 2025 universe, followed by interval funds Stone Ridge Trust II (63.41) and The Private Shares Fund (48.19), while REITs National Healthcare Properties, Inc. (32.15), and Invesco Real Estate Income Trust, Inc. (28.12) rounded out the top five.
BDC Dashboard: Top Five Firms by NAV
The BDC universe averaged an 8.9% distribution rate, a 7.2% TTM return, and 2.2% in shares repurchased. Among the top five by NAV, Ares Strategic Income Fund had the largest reported NAV at 27.48, while PGIM Private Credit Fund had the highest distribution rate (11.6%) and TTM return (13%) within the top five NAV cohort.
Observations and Trends
BDC distribution rates were stable year over year: the median matched-fund distribution-rate change was only three basis points, and 13 of 24 matched BDCs increased distributions. At the same time, average BDC TTM return declined to 7.2% in Q4 2025 from 9.6% in Q4 2024, suggesting income remained steady while capital appreciation or mark-to-market contribution moderated.
Interval funds remain the broadest and most yield-dispersed category. The Q4 interval fund set included 37 private credit funds, eight private real estate funds, and one private equity fund. The average interval fund distribution rate increased to 8.6% in Q4 2025 from 8.2% in Q4 2024, but the universe also contained the largest payout outliers.
REITs improved from a low base. REIT average TTM return increased to 3.5% from 1.3%, and average distributions rose to 4.6% from 4.0%. That combination points to a modest recovery in the real estate segment, though REIT distribution rates still trailed BDCs and interval funds by more than 400 basis points on average.
Connect Money Analysis
The Q4 2025 data reinforce a maturing private credit cycle. Yield remains compelling, but the market is increasingly rewarding discipline, scale and underwriting consistency. Investors are no longer simply chasing double-digit income—they are scrutinizing coverage ratios, NAV stability and manager track record.
Looking ahead, the semi-liquid BDC space appears positioned for continued relevance in wealth portfolios, particularly as investors seek income with lower volatility than public credit markets. However, manager selection is becoming critical. The next phase of the cycle will likely favor firms that can maintain income while preserving capital, separating durable platforms from those more exposed to credit deterioration.
