This week's tender offer results reflect persistent redemption stress for non-traded BDCs. Amid the continued liquidity strain and redemption backlogs, we decided to also take a deeper look at one story in particular: third parties offering secondary liquidity to shareholders of some of the largest funds facing prorated redemptions. We examine how to evaluate these offers by weighing three factors: time to exit, opportunity cost and the risk of staying invested.

Special Report: How to Evaluate Liquidity Options in Gated Funds like BCRED and HLEND

When your clients invest in semi-liquid private credit funds, they accept limits on when they can sell in exchange for an expected return premium over comparable public markets. That premium is not guaranteed. Over the past year, HLEND returned 7.05%, about 2.1 percentage points more than high-yield bonds, while BCRED returned 3.7%, trailing high yield by about 1.3 points. 1

Against that backdrop, many investors have sought to exit, and redemption requests at both funds ran well above their quarterly limits. But when a client wants liquidity and the fund's repurchase program is oversubscribed, advisors face a practical question: what does it actually cost your client to get out?

Recently, the market has offered two reference points. Cox Capital launched four cash tender offers for Class I shares of non-traded BDCs this past week, including offers for BCRED and HLEND of up to $40 million combined. Cox is bidding $20.65 per BCRED share, a 12.5% discount to the August 31 NAV of $23.60, and $20.17 per HLEND share, a 17.5% discount to the August 31 NAV of $24.45. The offers follow a quarter in which BCRED received repurchase requests representing approximately 10% of its outstanding shares, while HLEND received requests representing approximately 11.5%, roughly double the funds' 5% quarterly target.

The second comes from Harrison Street Real Estate Fund (VCMIX), an interval fund that has pro-rated repurchase requests for 15 consecutive quarters. The fund announced it has partnered with LODAS Markets and Nasdaq Fund Secondaries to run an auction as a way to extend liquidity to investors.2

What Cox's pricing tells us

The BCRED and HLEND offers join two other active Cox offers for Apollo Debt Solutions BDC (ADS) and Ares Strategic Income Fund (ASIF)3:

Notably, Cox's discounts have narrowed since its first round of offers in July, when it bid about 25% below NAV for HLEND and 15% below NAV for ASIF.4 One possible reason is limited participation at deeper discounts to NAV. If few shareholders were willing to sell at 25% off, that suggests most investors value their shares much closer to NAV. Moreover, Cox states that its prices reflect observable valuations of publicly traded BDCs, so changes in public BDC prices may also contribute to changes in its discounts.

The cost to exit is not the cost of illiquidity

Cox's discount is the cost to exit now: what it costs a client to sell today. The cost of illiquidity is different. It is what it actually costs a client to wait for their money, and for most clients it is lower. Three factors determine it.

Time to exit. How long would it take your client to exit through the fund’s repurchase program? Sekond's time-to-exit model estimates a full exit at approximately three quarters for BCRED and four quarters for HLEND if a client started the process today. Sekond’s model is based on redemption demand projections looking at a given fund’s historical data, peer market data for private credit funds and data for publicly traded credit funds. Clients continue to earn annualized distributions of 9.2% and 9.9% respectively while they wait, which helps offset much of the cost of time.

Opportunity cost. Capital waiting in the queue cannot fund a new investment, a client's spending need, or a rebalance to target allocation. When evaluating the opportunity cost, it is important to consider similar funds (Sekond covers 61 private credit funds), other asset classes or strategies (Sekond tracks 512 funds with net assets of $637.5B) and the expected return of such other funds over the exit period. 

Risk of staying invested. Waiting exposes clients to potential NAV declines or distribution cuts. While some private credit fundamentals appear steady, watching the trend of data points is key. Sekond data shows that PIK as a percentage of Total Investment Income and of Net Investment Income has risen since 2024 for all four BDCs Cox is bidding on.5 If we look at return forecasts for context, J.P. Morgan forecasts an annual return of 7.7% for direct lending, down from their prior forecast of 8.2%.6

Most exits are partial - pro-rated by the fund

For most clients, the headline discount overstates the cost to exit because they have likely already received part of their request at NAV through the fund's own repurchase program. Consider a client with a $1 million position in BCRED who receives $500,000 through the fund's quarterly repurchases and sells the remaining $500,000 to Cox. The blended cost to exit is 6.25% of the position, half the headline 12.5%.

Why secondary liquidity matters for your clients

Unfilled Q2 repurchase requests totaled approximately $5.1B across all private credit funds tracked by Sekond.7 Cox's program gives those clients a choice where once the only option was to wait. But tender offers are not the only model emerging. 

Harrison Street Real Estate Fund (VCMIX) has partnered with LODAS Markets and Nasdaq Fund Secondaries to run an auction outside the fund's scheduled repurchase windows.8 The first auction ran from August 28 to September 23, 2026, and is expected to settle October 2, 2026. We will make sure to post an update when the results become available.

Sellers are able to choose from pre-established targets, such as 5% below NAV. Buyers place bids based on those same price discount targets. When the window closes, shares trade only at the price with the highest number of matches. The seller pays a 2% transaction fee, with a $450 minimum. A client selling at 5% below NAV would therefore face a total cost to exit of about 7%. 

The two approaches differ in an important way for advisors: Cox's offers are independent of the funds, while the LODAS auction was set up in partnership with the fund's own manager. Either way, secondary buyers absorb exit demand without forcing funds to sell assets, which protects clients who remain invested. The discounts to NAV offered by Cox and buyers in the LODAS auction include compensation for the capital they provide and the risk they take on, so the cost to exit represents an upper bound on the cost of illiquidity rather than a precise measure.

What this means for advisors

For clients with long time horizons, healthy portfolios, and allocations at target, the cost of illiquidity is low, and staying invested may be the better choice. For clients who need immediate liquidity, a partial sale can be a reasonable, cost-contained solution. We expect more liquidity solutions for semi-liquid funds to emerge. 

For advisors, staying informed on liquidity is now part of the job. Sekond tracks redemption schedules, third-party tender offers and marketplace activity for all funds on the platform. Sekond's time-to-exit model can help you set expectations with clients around liquidity and quantify the cost for each client position before deciding on the best course of action. 

In other filings this week:

Apollo Debt Solutions BDC (ADS) Reports 3Q26 Tender Oversubscribed

Apollo Debt Solutions BDC reported that third quarter 2026 shareholder repurchase requests totaled approximately 14.7% of shares outstanding, well above the Fund's 5% quarterly cap. Consistent with its repurchase program terms, ADS will honor 5% of shares outstanding, representing an estimated $0.7 billion in gross outflows, against $0.2 billion in gross Q3 subscriptions — resulting in expected net outflows of approximately $0.5 billion, or 3% of NAV, for the quarter. The Fund noted that the majority of Q3 demand was re-tendered requests from prior unfulfilled quarters, and noted that investors seeking liquidity during 2026 will have received an estimated 75% of requested capital following Q3 payments.

Ares Strategic Income Fund (ASIF) 3Q26 Repurchase Requests Oversubscribed

Ares Strategic Income Fund reported that shareholders requested ~$1.3 billion and fulfilled ~38.2% of shares tendered ($515 million). Payment was made entirely in cash, distinguishing this from other promissory-note settlements.

Bow River Capital Evergreen Fund 3Q26 Tender Offer Undersubscribed

Bow River Capital Evergreen Fund completed its 3Q tender offer accepting total repurchases of approximately $17.0 million — representing roughly 1.3% of the Fund's $1.3 billion in net assets, well below the 5% cap.

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1High yield returns are based on the iShares Broad USD High Yield Corporate Bond ETF (USHY), NAV total return of 4.97% for the year ended 8/31/2026, source: BlackRock. USHY tracks the ICE BofA US High Yield Constrained Index. The return spread is an approximate proxy for the liquidity premium; differences in rate structure, leverage, and credit quality also contribute. Fund returns are for Class I shares, net of fees, as of 8/31/2026. Since inception, BCRED and HLEND have returned 9.0% and 9.9% annualized, respectively.

2LODAS Markets, lodasmarkets.com; Auction dates per LODAS Markets. https://harrisonstpw.com/vcmix/

3Cox Capital Partners,CoxCapitalPortal.com, active offers as of September 25, 2026. NAVs are each fund’s reported Class I NAV as of August 31, 2026.

4 HPS Corporate Lending Fund, Form 8-K filed July 2026; Ares Strategic Income Fund, Form 8-K filed July 2026. July discounts were measured against May 31, 2026 NAVs.

5PIK as % of Tot.Inv.Income for BCRED, HLEND, ADS, and ASIF averaged 5.87% as of 6/30/2024 and 6.8% as of 6/30/2026; PIK as % of NII averaged 10.54% as of 6/30/2024 and 13.1% as of 6/30/2026

6J.P. Morgan Private Bank, "30 years of foresight: The 2026 LTCMAs in focus," October 24, 2025, based on J.P. Morgan Asset Management's 2026 Long-Term Capital Market Assumptions (estimates as of September 30, 2025). Forecasts cover a 10- to 15-year horizon, reflect the median manager, include leverage, and are net of fees. Forecasts are not guarantees of future results.

7Sekond Research: Investors tendered approximately $17.4 billion, compared with $12.3 billion offered.

8 LODAS Markets, lodasmarkets.com; Auction dates per LODAS Markets. https://harrisonstpw.com/vcmix/

Important information

This article is provided by Sekond for informational and educational purposes only. It does not constitute investment advice, and it is not a recommendation, offer, or solicitation to buy, sell, hold, or tender any security, including shares of the funds or tender offers discussed.

Sekond's time-to-exit model and related analyses are estimates based on historical data, assumptions, and information from third-party sources believed to be reliable but not independently verified. Model outputs are hypothetical, may not reflect actual results, and are subject to change without notice. Actual repurchase outcomes, proration rates, timing, and returns may differ materially from any estimates shown.

Examples in this article are illustrative only and do not represent any specific client or investment.