Golub Capital BDC (NASDAQ: GBDC) reported adjusted net investment income of $0.34 per share for the fiscal quarter ended June 30, 2026. This figure fully covered the company's declared distribution of $0.33 per share, maintaining a stable payout despite a slight decline in net asset value to $14.25.

The improvement in adjusted net income to $0.22 per share, compared to a loss of $0.18 in the prior quarter, was driven primarily by a reduction in realized and unrealized losses. These losses narrowed to $0.12 per share from $0.52 per share in the previous period. Management attributed the remaining credit stress to specific junior debt and equity positions rather than the core first lien senior secured loan portfolio.

Portfolio performance and credit metrics

The company's portfolio remains diversified across 424 borrowers with an average position size of less than 0.2% of total investments. Non-accruals stood at 1.9% of total investments at fair value, up slightly from 18 investments to 20 investments during the quarter. Approximately 87% of the portfolio remained in the highest-performing internal rating categories.

Rob Toucher, Senior Managing Director, highlighted that new investment commitments totaled $13 million, reflecting a conservative underwriting stance with a weighted average loan-to-value of approximately 45%. The company closed on just 1.5% of deals reviewed, prioritizing accretive share repurchases and deleveraging over aggressive deployment.

Financial highlights

What the numbers show

A divergence exists between the headline adjusted ROE and the underlying yield dynamics. While the annualized adjusted ROE of 6.2% trails the company's historical 9.4% average, the adjusted NII ROE remained robust at 9.5%. This gap is entirely attributable to non-cash valuation marks on junior debt and equity positions, which accounted for the majority of the $0.12 per share loss. The core debt portfolio demonstrated stability, with realized losses from restructurings being more than offset by the reversal of prior unrealized losses.

Balance sheet and liquidity

GBDC ended the quarter with approximately $2 billion in liquidity, providing 1.3 times coverage of unfunded commitments and upcoming note maturities. The company issued $500 million in 5-year unsecured notes in May 2026, swapped to SOFR + 218 bps. Borrowing costs remained competitive at 5.3% annualized, one of the lowest in the listed BDC peer group.

Share repurchases continued as a capital allocation priority. The company bought back 1.1 million shares at a weighted average price of $12.90, representing an approximate 10% discount to the March 31, 2026 NAV. Additionally, the Golub Capital Rabbi Trust purchased $31 million worth of shares, bringing affiliate ownership to about 8% of shares outstanding.

Golub Capital appointed Matt Shafer as Managing Director and Head of Golub Equity Continuation Partners. The firm launched the GP-led private equity secondaries strategy last year to expand its equity investment capabilities.

Shafer will lead the growth and development of the strategy while working closely with Greg Cashman, Vice Chair and Co-Head of Golub Capital’s Sponsor Finance practice. The role focuses on expanding the firm’s activity in the growing market for continuation vehicles.

Executive Background

Shafer brings nearly three decades of global experience as an investor, financier, and advisor working with private equity firms. He was most recently Head of Capital Solutions and U.S. Private Equity at Northleaf Capital Partners. In that role, he helped lead private equity investment activities including secondaries, co-investments, and structured capital.

Prior to Northleaf, Shafer served as Partner and Head of Americas Private Equity at Vision Capital. He also spent 12 years in sponsor-focused investment banking roles with CIBC World Markets and Lehman Brothers.

Strategic Context

David Golub, Co-Chief Executive Officer of Golub Capital, stated that the appointment marks an important milestone in the growth of the GP-led secondaries business. He noted that the firm has already established that its longstanding sponsor relationships and rigorous underwriting capabilities can deliver value to sponsors, portfolio companies, and investors.

Shafer commented that investors need both broad coverage of private equity and deep company-specific underwriting expertise as continuation investments become a category in their own right. He cited Golub Capital’s outstanding culture and longstanding reputation as a partner of choice for financial sponsors as key factors in his decision.

What the Numbers Show

The strategic expansion aligns with Golub Capital’s broader scale. As of July 1, 2026, the firm had over 1,100 employees and over $90 billion of capital under management. This gross measure of invested capital includes leverage. The dedicated team for GECP combines Golub Capital’s underwriting talent with experienced private equity and secondaries market professionals.

Golub Equity Continuation Partners focuses on continuation vehicles and other investments that allow private equity sponsors to continue owning and growing high-quality businesses while providing liquidity solutions for limited partners.