This week we speak with M. Grier Eliasek, President and Chief Operating Officer of Prospect Capital Management. Prospect is a $7+ billion AUM leading provider of flexible private debt and equity capital to sponsor and non-sponsor owned middle market companies.

The Lead Left: Grier, is it my imagination or is a lot of capital coming into the middle market space?

Grier Eliasek: Randy, there’s definitely an influx of new capital coming into the private illiquid loan space. There are at least three reasons for that. First, there’s been a real increase in the listed BDC market place. When we went public ten years ago, there were only a handful of BDCs. Now there are over thirty. Second, there are a number of non-traded BDCs coming to market.

TLL: Is that unusual?

GE: They are outraising the traded funds by almost 2:1 year to date. That’s an unusual trend in a non-recessionary environment. Third, you’re also seeing a lot of private funds bringing senior lending capabilities to market, many of them leveraged. That all adds up.

TLL: What else are you seeing?