Alpha Buying: Insurers Warn. Credit Tightens. Insiders Buy Anyway.

If you spend any time in the Business Development Company (BDC) world right now, you can feel the pressure in the air the same way an old sailor senses a storm coming long before the first raindrop. The waves are still smooth enough, but every so often there is a low rumble that makes you tighten the lines and look out toward the horizon. After several years of being the market's favorite way to grab a double-digit yield, BDCs are entering a more complicated phase of the cycle. The days of rising base rates pushing net investment income higher quarter after quarter are fading. Rates are drifting lower, competition in private credit is intense, and spreads have tightened to the point where lenders have to work harder and think smarter to earn the same return.

At the same time, there is a sense that some of the easy credit standards of the last few years are coming back to bite the industry. Payment in kind income has crept higher. Some borrowers are showing stress through amendments or restructurings rather than clean non-accruals. Portfolio marks look great until someone actually wants liquidity, and then the conversation shifts quickly. Add in a growing chorus of warnings from regulators about the rapid growth of private credit and the lack of transparency around the lower-quality corners of the market, and you get a sector wrestling with the question that matters most to yield-focused investors: how real are the marks and how durable is the income stream?

The Blue Owl episode did not help the mood. The abandoned merger between OBDC and its private counterpart crystallized the very concerns that had been hanging in the air. Investors were suddenly forced to confront the gap between private marks and public market valuations, and the idea that liquidity in private credit products can evaporate at exactly the wrong moment. That entire saga left a lingering sense of distrust and reminded investors that governance matters every bit as much as underwriting.

Still, even with the uncertainty, this is not a story of collapse. It is a story of divergence. The strong players with senior secured books and disciplined lending cultures continue to show low non-accruals and good dividend coverage. The weaker ones, especially those deep in venture and story credits, are the first to feel the cracks in the pavement. In this kind of environment, one of the simplest and most reliable signals is insider activity. When management is opening their own wallets in a tough market, that gets my attention.

With that in mind, let's look at three BDCs where the insiders have been stepping up: Sixth Street Specialty Lending, Blue Owl Capital Corp, and TriplePoint Venture Growth.

Sixth Street Specialty Lending (NYSE:TSLX)
Sixth Street Specialty Lending is one of the true professionals in the BDC arena. The company focuses on upper middle market borrowers with a heavy emphasis on first lien senior secured loans. It carries the kind of credit discipline and underwriting culture that investors pay a premium for, and the market has rewarded it with a valuation above net asset value. The dividend is well covered, earnings continue to run ahead of the payout, and the overall credit profile remains among the best in the publicly traded BDC universe. When the industry gets jittery, this is the firm many investors treat as a safe harbor.

What makes TSLX especially interesting right now is that insiders have been buying even at a premium valuation. They are not bargain hunting after a collapse. They are writing checks because they believe the company's disciplined lending, conservative structure, and consistent earnings power give it staying power in a more volatile environment. In a market where many BDCs trade at discounts because investors question the marks and worry about dividend sustainability, TSLX's leadership is signaling confidence with their own money. That kind of behavior fits the long-term pattern of this platform. They tighten standards when others chase yield, protect the balance sheet when the wind shifts, and step in to buy when investors get nervous.

Blue Owl Capital Corp (NYSE:OBDC)
Blue Owl Capital Corp is one of the largest BDCs in the market and carries tremendous scale, origination capacity, and sponsor relationships. On paper, the numbers are still strong. The company continues to generate net investment income that fully supports the dividend, and the yield investors collect is firmly in double-digit territory. The portfolio is broadly diversified, and the core engine of the business remains productive. From a pure income standpoint, OBDC still looks like an attractive vehicle for investors who want size and stable cash flow.

The challenge is trust. The proposed merger with the private counterpart earlier this year damaged investor confidence and highlighted every fear lurking beneath the surface about marks, liquidity, and governance in private credit. Even after the deal was pulled, the market is demanding a steep discount to net asset value as the price for owning the stock. What makes the situation compelling is that insiders, including the CEO, have been aggressively buying shares into the weakness. That is real money leaning into a double-digit yield and a wide discount at a moment when sentiment is still bruised. OBDC has become a referendum on how much the market trusts the private credit ecosystem. If confidence stabilizes and investors look past this year's turmoil, this is the type of name that can re-rate sharply. If not, it will be one of the clearest indicators that private credit has deeper problems than the industry wants to admit.

TriplePoint Venture Growth (NYSE:TPVG)
TriplePoint Venture Growth sits at the intersection of private credit and venture lending, which is where credit stress tends to show up first when funding conditions tighten. TPVG lends to later stage venture-backed companies and supplements its interest income with equity warrants that can produce meaningful upside in strong markets. The structure offers high potential returns, but it also carries more volatility and more borrower sensitivity to capital market conditions. NAV has drifted lower, non-accruals are elevated compared to more traditional BDCs, and the market has pushed the stock to a steep discount to book value.

Yet insiders have been buying in size. Senior leadership and affiliated entities have stepped in repeatedly during the recent selloff, purchasing shares aggressively in the open market. That is not symbolic buying. It is a direct bet that the market has overreacted to the credit concerns and that the core of the portfolio is more resilient than the current price implies. TPVG carries a high yield relative to its trading price, reflecting both the risk and the potential reward. In this part of the BDC universe, investors have to do real credit work and understand the story behind each borrower. But insider buying of this magnitude tells you that those closest to the credit book believe the market has priced in far more pain than the fundamentals warrant.

Across TSLX, OBDC, and TPVG, a clear message is emerging. Insiders are using a period of uncertainty to buy their own shares. Some are doing it from a position of strength. Others are doing it to show faith in a recovery. And a few are doing it because they believe the market has simply overreacted. In an environment where the headlines are focused on risk and the sector's reputation has taken a few hits, insider buying becomes a powerful signal. It tells you who is willing to back their words with their own capital and who is watching from the sidelines.

This is not a moment to walk away from BDCs. It is a moment to sharpen the pencil, focus on credit quality, and pay close attention to who is stepping up when the weather turns rough.