The U.S. Securities and Exchange Commission has updated rules on Business Development Company co-investment transactions, relaxing restrictions on BDCs and their affiliates, and allowing them to invest more easily in small and medium-sized businesses. The guidance removes roadblocks to those investments, so different types of BDCs will be able to operate on more even footing.

"BDCs have had restrictions when they have a registered investment adviser, as far as limited partners that are in a private fund that they advise being prohibited from investing in deals that the BDC is doing," says Brett Palmer, president of the Small Business Investor Alliance. The alliance is a group of lower middle-market private equity funds and investors.

Subscribe Now

Complete access to real-time information and analysis of news and trends in the industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.