Carlyle Secured Lending, Inc. (CGBD): History, Ownership, Mission, How It Works & Makes Money

Are you looking at Carlyle Secured Lending, Inc. (CGBD) and wondering how this Business Development Company (BDC) is navigating the current credit environment, especially after its significant merger in early 2025?

The firm, managed by a subsidiary of Carlyle, has successfully scaled its platform, boosting total investments to approximately $2.4 billion as of September 30, 2025, with 95% of its portfolio in senior secured loans, defintely a strong defensive position. For the third quarter of 2025, the company generated Net Investment Income of $0.37 per share (GAAP) and declared a fourth-quarter dividend of $0.40 per share, translating to an attractive yield of over 12% based on recent share price, but what does this mean for future capital deployment and risk?

If you want to understand the engine behind these numbers-its history, its clear mission to lend to U.S. middle-market companies, and exactly how it makes money-you need to see the full picture.

Carlyle Secured Lending, Inc. (CGBD) History

You want to understand the foundation of Carlyle Secured Lending, Inc. (CGBD) before you commit capital, and that's smart. The company's story isn't about a startup in a garage; it's a strategic evolution from a private credit vehicle within a global powerhouse, The Carlyle Group, into a publicly traded business development company (BDC). This transition gave it scale and public market access, which are critical for its current strategy of lending to middle-market companies.

Carlyle Secured Lending, Inc.'s Founding Timeline

Year established

The company commenced investment operations in May 2013, initially under the name TCG BDC, Inc.

Original location

The firm is headquartered in New York, New York, leveraging the city's role as a major financial center.

Founding team members

While the initial founding team members are not explicitly named in the public record as a distinct startup group, the company's formation and early strategy were driven by key figures within The Carlyle Group's Global Credit platform. The current leadership team, which is executing the latest growth phase, includes CEO and President Justin V. Plouffe, and Chairman of the Board Linda Pace.

Initial capital/funding

The initial capital came from private sources within The Carlyle Group's ecosystem. The first major public capital event was the Initial Public Offering (IPO) in June 2017, where the company priced 9,000,000 shares of common stock at $18.50 per share. By the time of the IPO, the company had already invested more than $2.4 billion in debt and equity.

Carlyle Secured Lending, Inc.'s Evolution Milestones

Carlyle Secured Lending, Inc.'s Transformative Moments

The trajectory of Carlyle Secured Lending, Inc. has been defined by a few key strategic decisions that fundamentally changed its scale and market position. Honestly, these moves show a clear, defintely disciplined approach to growth in the direct lending space.

The first big shift was the 2017 IPO. This move gave the company a permanent capital base, which is crucial for a BDC that needs to consistently originate and hold loans. It allowed them to move beyond a fund structure and offer public investors access to private credit returns. Exploring Carlyle Secured Lending, Inc. (CGBD) Investor Profile: Who's Buying and Why?

The second, and perhaps most impactful recent move, was the March 2025 merger with Carlyle Secured Lending III. This wasn't just a simple consolidation; it was a strategic platform expansion.

• Scale Enhancement: The combined entity immediately grew to over $2.8 billion in total assets, which enhances its competitive position in the middle-market lending space.
• Liquidity Boost: The increased market capitalization from the merger is expected to offer better trading liquidity and attract a broader institutional investor base.
• Capital Optimization: The deal also eliminated the risk of dilution from preferred stock conversion, which was a smart, clean-up move for the capital structure.

Here's the quick math on the merger's impact: CSL III stockholders received 18,935,108 shares of CGBD common stock, making the combined company much larger. Plus, with a statutory leverage of 1.10x as of June 30, 2025, the company is operating within its target range, ready to capitalize on new deal flow.

Carlyle Secured Lending, Inc. (CGBD) Ownership Structure

Carlyle Secured Lending, Inc. is an externally managed Business Development Company (BDC) that trades publicly on NASDAQ under the ticker CGBD, meaning its operations are run by an affiliate of Carlyle, The Carlyle Group Inc., rather than its own employees.

This structure is key: the company is governed by a Board of Directors, but its investment decisions and day-to-day management are handled by Carlyle Global Credit Investment Management L.L.C.. This external management model is common for BDCs, but it means you must scrutinize the management fee structure alongside the stock performance.

Given Company's Current Status

Carlyle Secured Lending, Inc. is a publicly traded company on the NASDAQ Global Select Market (NASDAQ: CGBD). It operates as a Business Development Company (BDC), a regulatory classification that requires it to distribute at least 90% of its taxable income to shareholders, which is why it offers a high dividend yield, currently around 13.5% as of November 2025.

The firm is externally managed by Carlyle Global Credit Investment Management L.L.C., a wholly-owned subsidiary of the global investment firm Carlyle. The total fair value of its investments stood at approximately $2.4 billion as of the third quarter of 2025, demonstrating its significant scale in the middle-market lending space. For the 2025 fiscal year, analysts project an Earnings Per Share (EPS) of around $2.00, a critical metric for evaluating its dividend coverage.

Given Company's Ownership Breakdown

The ownership structure of Carlyle Secured Lending, Inc. is heavily weighted toward retail and institutional investors, which is typical for a BDC focused on income generation. This diverse shareholder base ensures no single entity, outside of the external manager Carlyle, holds a controlling interest in the company's common stock.

The institutional ownership percentage, at 34.76%, is a strong indicator of professional confidence in the company's strategy, though it's still lower than the retail share. You can dig deeper into the major holders by Exploring Carlyle Secured Lending, Inc. (CGBD) Investor Profile: Who's Buying and Why?

Given Company's Leadership

The leadership team is a blend of Carlyle veterans and experienced finance professionals, steering the company's direct lending strategy. Their decisions directly impact the portfolio's credit quality and, consequently, the dividend stability.

• Justin V. Plouffe: Chief Executive Officer and President. He also serves as the Deputy Chief Investment Officer for Carlyle Global Credit, linking the BDC directly to the broader Carlyle platform.
• Thomas M. Hennigan: Chief Financial Officer, Chief Operating Officer, and Chief Risk Officer for Direct Lending. His dual role is defintely critical for balancing growth and risk management.
• Michael Hadley: Chief Investment Officer and Head of Underwriting. He is responsible for the rigorous selection and structuring of the middle-market loans that form the core of the portfolio.
• Linda Pace: Chair of the Board and Independent Director. As Chair, she leads the board's oversight function, which is particularly important in an externally managed structure to protect shareholder interests.

The Board of Directors, as required for a BDC, maintains a majority of independent directors to provide objective oversight of the external manager, Carlyle Global Credit Investment Management L.L.C..

Carlyle Secured Lending, Inc. (CGBD) Mission and Values

Carlyle Secured Lending, Inc. (CGBD) operates with a clear, financially-driven mandate: to generate both current income and capital appreciation for its shareholders by providing essential debt financing to U.S. middle-market companies. This is a disciplined, credit-first approach.

The company's cultural DNA is rooted in the broader Carlyle Group's ethos of deep industry expertise and rigorous underwriting, focusing on stability and consistent returns for investors.

Given Company's Core Purpose

The core purpose of Carlyle Secured Lending is to be a reliable capital provider in the private credit market, specifically targeting the U.S. middle-market sector, a segment often underserved by traditional banks. This focus is what drives their investment selection.

For example, as of September 30, 2025, the total fair value of their investments reached approximately $2.4 billion, demonstrating the scale of their commitment to this market. You can dig deeper into the metrics that support this strategy in Breaking Down Carlyle Secured Lending, Inc. (CGBD) Financial Health: Key Insights for Investors.

Official mission statement

While not a flowery corporate paragraph, the formal investment objective of Carlyle Secured Lending, Inc. serves as its mission statement, clearly defining its financial goal and target market.

• Generate current income and capital appreciation.
• Achieve this primarily through debt investments in U.S. middle-market companies.
• Maintain a focus on senior secured loans, which constituted 95% of their investments as of September 30, 2025.

Honestly, their mission is simple: be a consistent, high-yield credit engine for shareholders.

Vision statement

The company's vision is less about a single future state and more about a continuous, disciplined execution of their strategy, leveraging the vast resources of The Carlyle Group to maintain a leading position in direct lending.

• Deliver a resilient, stable cash flow stream to investors through consistent income and solid credit performance.
• Focus on companies with defensive niche strategies and sustainable leading market positions.
• Maintain disciplined underwriting standards; for instance, their statutory leverage was 1.10x as of June 30, 2025, reflecting a commitment to managing risk.

The parent company, Carlyle, has a broader purpose: to invest wisely and create value on behalf of its investors, portfolio companies, and the communities it serves.

Given Company slogan/tagline

Carlyle Secured Lending does not use a formal, consumer-facing tagline, but their actions and communication center on a clear operational mantra that guides investor expectations.

• Discipline and Consistency: These two tenets defintely drove performance in the third quarter of 2025.
• Stable Income Generation: The company declared a base quarterly common dividend of $0.40 per share for the fourth quarter of 2025, underscoring this commitment.

Their unofficial slogan could be: 'Disciplined Underwriting, Stable Cash Flow.'

Carlyle Secured Lending, Inc. (CGBD) How It Works

Carlyle Secured Lending operates as a Business Development Company (BDC), acting as a non-bank lender that pools capital from investors to provide financing to U.S. middle-market companies. The company generates its income primarily from interest payments on secured loans, effectively giving investors direct exposure to private credit markets.

You can think of it as a specialized, high-yield bank for private equity-backed businesses that are too large for small business loans but not big enough for the public bond markets. The goal is simple: generate current income for shareholders, which is why the Q4 2025 dividend was declared at $0.40 per share.

Carlyle Secured Lending's Product/Service Portfolio

The company's investment strategy focuses on senior secured debt, which means their loans are backed by the borrower's assets, reducing risk. As of September 30, 2025, the total fair value of investments stood at $2.4 billion across 158 portfolio companies.

Carlyle Secured Lending's Operational Framework

Carlyle Secured Lending is an externally managed BDC, meaning its investment decisions and day-to-day operations are run by Carlyle Global Credit Investment Management L.L.C., a subsidiary of The Carlyle Group Inc.

This structure allows CGBD to tap into the vast sourcing and due diligence capabilities of a global investment firm. Honestly, that's a huge operational advantage for a company of this size.

• Capital Deployment: The company actively invests, funding $260.4 million in new investments during Q3 2025 alone, with a weighted average yield of 9.5%.
• Funding Strategy: CGBD utilizes a mix of equity and debt, maintaining statutory leverage at approximately 1.1 times debt-to-equity, which is right at the midpoint of their target range.
• Portfolio Management: The investment portfolio is highly diversified across more than 25 industries, with the largest exposures in Healthcare & Pharmaceuticals, Software, and Business Services.
• Corporate Action: A significant operational move in Q1 2025 was the merger with Carlyle Secured Lending III (CSL III), which immediately increased the total fair value of investments to $2.2 billion and streamlined the corporate structure.

Carlyle Secured Lending's Strategic Advantages

The company's success in the competitive private credit market hinges on a few clear, strategic pillars that mitigate risk and drive stable income. You're defintely looking for a defensive posture in this market.

• Sponsor-Backed Focus: Approximately 93% of the portfolio is invested in companies backed by financial sponsors (private equity firms), which provides an extra layer of due diligence and capital support.
• Floating-Rate Dominance: Nearly all investments, specifically 99.4%, are floating-rate. This is crucial in a high-interest-rate environment, as it means investment income automatically rises with the SOFR (Secured Overnight Financing Rate), protecting against inflation.
• Carlyle Global Credit Platform: Leveraging the scale of The Carlyle Group, which had $474 billion of assets under management as of September 30, 2025, provides proprietary deal flow and deep sector expertise that smaller BDCs can't match.
• Credit Quality: The focus on senior secured lending has kept credit quality relatively strong, with non-accrual investments (loans not generating interest) decreasing to 1.6% of the portfolio at cost as of Q3 2025.

To understand the foundational principles guiding these decisions, you should review the Mission Statement, Vision, & Core Values of Carlyle Secured Lending, Inc. (CGBD).

Carlyle Secured Lending, Inc. (CGBD) How It Makes Money

Carlyle Secured Lending, Inc. (CGBD) generates its revenue primarily by acting as a specialized lender, extending loans to U.S. middle-market companies. As a Business Development Company (BDC), its core financial engine is the interest income earned from its portfolio of senior secured debt investments, which are typically floating-rate loans.

This model is straightforward: the company borrows capital, combines it with shareholder equity, and lends it out at a higher interest rate, capturing the spread (or net interest margin) as profit. It's a classic credit business. The company is required to distribute at least 90% of its taxable income to shareholders, which is why its dividend yield is so high.

Carlyle Secured Lending, Inc.'s Revenue Breakdown

The vast majority of CGBD's income comes from contractual interest payments on its debt portfolio. Given that the investment portfolio is heavily concentrated in first lien senior secured loans, the reliance on interest income is near total. The total investment income for the third quarter of 2025 was $66.51 million.

Here's the quick math: The total investment income for Q3 2025 grew to $66.51 million from $55.97 million in Q3 2024, reflecting an increasing trend driven by a larger portfolio and higher prevailing interest rates.

Business Economics

Carlyle Secured Lending's economic model is built on capturing the spread between the interest rate it earns on its loans and the cost of its own financing. The key is its focus on senior secured debt, which is the safest position in a company's capital structure, protecting the principal investment.

• Floating-Rate Advantage: As of Q3 2025, nearly all of CGBD's debt investments are floating-rate. This means when the Federal Reserve raises its benchmark rate, the interest income CGBD earns on its loans automatically adjusts higher, which helps protect its net investment income (NII) in a rising rate environment.
• Weighted Average Yield: New investment fundings in Q3 2025 had a weighted average yield of 9.5%. This is the effective interest rate CGBD is earning on its fresh capital deployment.
• Leverage and Scale: As a Business Development Company (BDC), CGBD uses financial leverage to amplify returns. As of September 30, 2025, its debt-to-equity ratio was 1.09, which is within its target range, allowing it to earn a return on both equity and borrowed capital.
• Credit Quality: Non-accrual investments-loans where interest payments are significantly past due-decreased to just 1.6% of the total portfolio's fair value in Q3 2025, indicating strong overall credit performance and disciplined underwriting.

Carlyle Secured Lending, Inc.'s Financial Performance

The company's financial health is best assessed by its Net Investment Income (NII) and Net Asset Value (NAV) per share. For the full fiscal year 2025, analysts project total revenue to be around $0.26 billion and earnings per share to be approximately $1.25.

• Net Investment Income (NII): For the third quarter of 2025, the Adjusted Net Investment Income was $0.38 per common share. This is the core measure of the company's operating profitability and its ability to cover the dividend.
• Net Asset Value (NAV): As of September 30, 2025, the NAV per common share was $16.36. This represents the book value of the company's assets minus its liabilities, and it saw a slight decrease of 0.4% during the quarter.
• Investment Portfolio Size: The total fair value of CGBD's investment portfolio grew to $2.4 billion as of September 30, 2025, reflecting continued deployment of capital into new and existing borrowers.
• Dividend Coverage: The Board declared a fourth-quarter 2025 dividend of $0.40 per common share. While the quarterly NII of $0.38 per share was slightly below the dividend, the company maintains an estimated $0.86 per share of 'spillover income' from previous years to support the payout.

What this estimate hides is the potential for unrealized losses; the company reported a total realized and unrealized net loss of $3 million in Q3 2025, which contributed to the slight NAV decline. You should defintely monitor the credit quality of the portfolio closely. Breaking Down Carlyle Secured Lending, Inc. (CGBD) Financial Health: Key Insights for Investors

Carlyle Secured Lending, Inc. (CGBD) Market Position & Future Outlook

Carlyle Secured Lending, Inc. (CGBD) is strategically positioned as a scaled-up, senior-secured-focused Business Development Company (BDC) following its Q1 2025 merger, giving it a portfolio of over $2.4 billion in investments as of Q3 2025. The company's future outlook hinges on its ability to leverage the immense deal-sourcing power of the Carlyle Group platform to navigate a tightening credit environment, especially as its net investment income (NII) just covers its base dividend.

Competitive Landscape

Carlyle Secured Lending operates in a highly competitive direct lending market dominated by BDCs backed by massive alternative asset managers. While CGBD benefits from the Carlyle brand, its market capitalization of approximately $871.9 million as of November 2025 places it in the smaller tier of publicly traded BDCs compared to its largest peers.

Here's the quick math: CGBD's market share percentage above is calculated against the total market capitalization of this peer group, showing its relative size. Honestly, the competition is fierce, and scale matters defintely in this business.

Opportunities & Challenges

The company's strategic initiatives for 2025 have focused on increasing scale and fortifying the portfolio, but the macroeconomic environment presents clear risks, particularly around credit quality and interest rate movements. The expected earnings per share (EPS) for the coming year is projected to decrease by -11.68% (from $1.97 to $1.74 per share), which signals a challenging path for NII growth.

Industry Position

Carlyle Secured Lending is a mid-sized player in the vast U.S. Business Development Company sector, which holds an aggregate fair value of investments totaling approximately $451.1 billion as of Q1 2025. CGBD's share of this total market is small, around 0.53%, but its strategy is clear: focus on credit quality over sheer volume.

The company's primary strength is the institutional backing of The Carlyle Group, which provides a significant advantage in sourcing and underwriting complex, directly originated loans. This relationship allows CGBD to specialize in the middle-market, primarily targeting companies backed by private equity sponsors.

• Maintain a high concentration in first lien senior secured debt, a key defensive measure against economic uncertainty.
• NAV per share stood at $16.36 as of September 30, 2025, showing resilience compared to the average peer decline over the last five years.
• The firm's strategic goal is to deliver consistent, stable cash flow, supported by a Q4 2025 dividend declared at $0.40 per share.

For a deeper dive into who is investing in CGBD and why they are drawn to its specific risk-reward profile, you should be Exploring Carlyle Secured Lending, Inc. (CGBD) Investor Profile: Who's Buying and Why?