You need seven concise rollups to govern a BDC: Portfolio Performance, Income & Yield, Credit Quality & Delinquency, Liquidity & Cash Flow, Valuation & Fair Value, Compliance & Covenant Monitoring, and Operational Efficiency & Expense. Each consolidates KPIs, flags risks, and drives decisions—NAV, yield, delinquencies, cash forecasts, Level 3 valuation exposures, covenant breaches, and cost trends. They’re automated, auditable, and actionable so you can prioritize remediation and capital allocation—keep going to see how each report informs specific board actions.
Key Takeaways
- Portfolio performance rollups consolidate NAV, yield, and default trends for quick profitability and risk assessment.
- Income and yield rollups aggregate revenue streams and yield metrics for real-time income visibility and forecasting.
- Valuation and fair-value rollups document inputs, methodologies, and Level 3 assumptions for ASC 820 and Rule 2a-5 compliance.
- Credit quality and liquidity rollups monitor delinquency, vintage performance, charge-offs, and short-term liquidity ratios to detect stress.
- Compliance, covenant, and expense rollups track qualifying-asset percentages, leverage, operational cost trends, and breach alerts for timely remediations.
Portfolio Performance Rollup
When you need a clear snapshot of portfolio health, a portfolio performance rollup consolidates KPIs—like NAV, yield, and default rates—across all investments so directors can quickly assess profitability and risk exposure. You’ll get consolidated NAV trends, yield metrics, and default patterns that let you benchmark against industry standards and pinpoint top performers or underperformers. Automated rollups reduce manual entry and errors, so you can act faster and make changes, reallocating capital or adjusting underwriting without delay. AI-enhanced insights surface emerging risks and opportunities, improving resource allocation and long-term resilience. Use the rollup to inform strategic meetings, set measurable targets, and maintain disciplined oversight of the BDC’s aggregated performance.
Income and Yield Rollup
A single Income and Yield Rollup consolidates revenue streams and yield metrics across business units so you can see, in real time, where income is originating and how efficiently capital’s being deployed. You’ll use income trends analysis to identify persistent drivers and anomalies, isolating units or sectors that disproportionately contribute to net returns. Automated data infrastructure delivers timelier inputs for revenue forecasting methods, letting you test scenarios and adjust allocations before quarter-end. Benchmarking against industry standards highlights underperformers and informs yield optimization strategies that balance risk, fee structures, and capital concentration. The rollup sharpens board-level discussions by translating granular records into actionable metrics, so you can reallocate capital with confidence and improve portfolio-level profitability.
Credit Quality and Delinquency Rollup
You’ll want to monitor delinquency rate trends across the portfolio to spot emerging stress before it widens. Use vintage cohort analysis to trace performance by origination period and isolate structural weaknesses versus cyclical effects. Track charge-offs and recoveries alongside these metrics to assess realized losses, workout effectiveness, and reserve adequacy.
Delinquency Rate Trends
Rising delinquencies demand your attention: BDC sector rates climbed from 3.5% in Q2 2022 to 4.8% in Q2 2023, driven largely by middle‑market loans—now at their highest decade‑plus level—with pronounced concentration risk in retail and hospitality. You need precise delinquency rate analysis to spot where stress is accumulating and to guide credit risk assessment across portfolios. Rollup reports highlight that diversified BDCs show lower delinquencies, while industry‑concentrated lenders face sharper swings amid market sector fluctuations. Use AI‑enhanced analytics in rollups to detect early patterns, prioritize remediation, and adjust underwriting or reserves. Directors should insist on timely metrics, drilldowns by vintage and industry exposures, and actionable thresholds so interventions occur before non‑accruals materially impair NAV.
Vintage Cohort Analysis
When you track loan performance by vintage cohorts, you get a clear, time‑aligned view of credit quality and delinquency trajectories that exposes underwriting strengths or weaknesses across origination periods. You’ll use vintage trends to isolate when credit deterioration begins, comparing cohorts to industry benchmarks and economic cycles. Rollup reports aggregate cohort delinquencies so you can spot early warning signs and quantify shifts in credit quality without noise from mixed vintages. That lets you test underwriting effectiveness, adjust covenants, or reallocate capital promptly. By monitoring cohort paths over time, you’ll forecast potential losses more accurately and prioritize remediation where deterioration concentrates. Vintage cohort analysis turns raw delinquency data into actionable risk management decisions.
Charge-off and Recoveries
One clear metric directors should track is the net charge-off rate, since it directly signals realized credit losses and, combined with recovery rates, determines the portfolio’s ultimate loss severity. You’ll use charge-off impact to quantify loss trends, inform provisioning, and adjust exposure limits. Recoveries and recovery strategies shift net loss outcomes, so rollup reports must show both gross charge-offs and post-recovery results. Monitor delinquency upticks as early warnings of elevated credit risk and potential future charge-offs.
- Aggregate charge-off impact across portfolios to spot concentration risk.
- Track recovery strategies effectiveness by vintage and deal type.
- Compare recovery rates to industry benchmarks for context.
- Use delinquency trend lines to trigger proactive remediation.
Liquidity and Cash Flow Rollup
You’ll want the liquidity rollup to surface each portfolio company’s cash conversion cycle so you can spot working-capital constraints quickly. Include an operating cash forecast that aggregates short- and medium-term inflows and outflows to test funding needs under stress scenarios. Monitor short-term liquidity ratios across the portfolio to prioritize interventions and preserve optionality.
Cash Conversion Cycle
Liquidity measurement is central to a director’s oversight: the Cash Conversion Cycle (CCC) quantifies how long it takes your portfolio companies to turn investments in inventory and receivables into cash, and a shorter CCC—typically under 30 days for BDCs—signals stronger liquidity, faster reinvestment capacity, and less dependence on external funding. You’ll use CCC to assess cash flow strategies, inventory management, and receivables optimization, spotting elongating cycles early so you can adjust credit terms or inventory levels. Focus reporting on component drivers and trends, not just the aggregate number. Key governance actions include:
- Monitor days sales outstanding, days inventory outstanding, and days payable outstanding.
- Set thresholds and escalation triggers.
- Require root-cause analysis for deviations.
- Tie CCC targets to reinvestment and funding decisions.
Operating Cash Forecast
A reliable operating cash forecast consolidates projected inflows and outflows across portfolio companies so directors can spot timing gaps and signal funding needs before they become crises. You’ll use consolidated rollups to monitor near- and medium-term cash positions, enabling proactive cash flow management and targeted liquidity planning. By blending historical trends with scenario-based projections you improve forecasting accuracy and reduce surprise funding calls. Regular updates keep assumptions current, letting you reallocate capital, prioritize investments, or arrange bridge financing promptly. The forecast should be granular enough to reveal unit-level drivers yet standardized for board review, with clear triggers for escalation. That disciplined approach strengthens operational resilience, keeps covenant and payment obligations met, and gives you confidence to execute strategic decisions without undermining liquidity.
Short-Term Liquidity Ratios
Having a reliable operating cash forecast naturally leads to tracking short-term liquidity ratios so you can see how projected inflows and outflows affect your ability to meet near-term obligations. You’ll monitor the current ratio (current assets/current liabilities) and the quick ratio (excluding inventory) to spot deteriorating trends and financial distress indicators before they escalate. These rollup metrics guide liquidity management strategies and inform asset allocation decisions and debt management. Use rollup reporting to compress period-over-period data into actionable signals you can act on.
- Current ratio ≥1.0 signals adequate working capital.
- Quick ratio >1.0 provides a stricter cash-readiness check.
- Cash flow variances pinpoint operational gaps.
- Trend divergence triggers immediate allocation or financing choices.
Valuation and Fair Value Rollup
Because rollup reports consolidate disparate valuation inputs into a single view, they’re essential for directors to assess fair value across the portfolio and to confirm compliance with ASC 820 and Rule 2a-5. You use rollups to document valuation methodologies, enforce asset categorization, and run market comparisons so every fair value conclusion is reproducible and defensible. They spotlight Level 3 holdings that need judgment, capture valuation drivers, and record assumptions and sensitivity analyses. Regular, disciplined rollups reduce surprise volatility, enhance transparency for investors, and allow you to detect valuation trends and emerging risks early. By centralizing inputs and audit trails, rollup reports give you the governance framework to challenge marks, approve adjustments, and confirm consistent, regulatorily compliant fair value reporting.
Compliance and Covenant Monitoring Rollup
When you consolidate covenant and compliance metrics into a single rollup, you get a precise, actionable view of regulatory adherence and loan covenant performance across the portfolio. You’ll use that rollup to enforce regulatory compliance strategies and to surface loan covenant challenges early, relying on automated data to validate financial metric assessment consistently. The rollup tracks qualifying-asset percentages (>=70%) and leverage ratios (<150%), and it delivers breach alerts so you can act before issues escalate. It reduces manual reporting while improving accuracy, letting you focus on remediation and governance decisions.
Consolidated covenant rollups deliver precise, automated compliance insights—tracking qualifying-asset and leverage thresholds and surfacing breaches early.
- Monitor qualifying-asset percentage against the 70% threshold.
- Track leverage ratios to maintain the 150% cap.
- Receive automated covenant-breach alerts.
- Rely on audited data for financial metric assessment.
Operational Efficiency and Expense Rollup
Rollup reports give you a single, authoritative view of operational efficiency and expense trends across all business units, making it clear where costs are drifting, where processes underperform, and where savings can be realized. You’ll consolidate metrics, automate reconciliation, and refocus time toward strategy. Rollups surface opportunities for cost optimization strategies, enable operational benchmarks analysis against industry standards, and integrate expense tracking tools so you can act decisively.
| Metric | Current Trend | Action |
|---|---|---|
| Total Opex | Rising 6% QoQ | Prioritize vendor renegotiation |
| Process Time | +12% delay | Streamline workflows |
| Benchmark Gap | 8% above peer | Reallocate resources |
| Automation Savings | Estimated 10% | Invest in expense tools |
Use this clarity to set targets, monitor progress, and enforce accountability.
Frequently Asked Questions
Which Information Is Included in the Rollup Report?
You’ll find key metrics analysis, investment performance trends, risk assessment insights, benchmarking across units, KPI dashboards, action-oriented visualizations, consolidated financials, and AI-driven recommendations so you can pinpoint issues, prioritize actions, and monitor strategic alignment.
What Is the 90 Rule for BDC?
The 90 Rule requires you to derive at least 90% of BDC income from qualified investments, ensuring BDC performance metrics, investment strategies, and regulatory compliance align with supporting eligible portfolio companies and preserving tax and RIC status.
What Reporting Is Required for a Private BDC?
Right off the bat, you’ve got to file Form N-54A, submit BDC financials via 10-K/10-Q, maintain regulatory compliance, document Rule 38a-1 controls, report asset composition and leverage, and disclose investment strategies and valuations.
What Are the Requirements for a BDC?
You must follow BDC compliance standards: organize as a corporation/trust/LLC, elect BDC status, maintain majority-independent board, meet asset and leverage tests, file SEC reports, apply ASC 820 valuations, and document BDC operational guidelines and BDC investment strategies.
Conclusion
You’ll rely on these seven rollup reports to run your BDC with surgical precision, turning messy data into crystal-clear decisions. They’ll show portfolio performance, income and yield, credit health, liquidity, valuation, compliance, and operational efficiency—so you never miss a risk or opportunity. Use them routinely, demand accuracy, and act fast on insights; they’re your compass and megaphone combined, guiding governance and maximizing returns with ruthless clarity.