Exploring Carlyle Secured Lending, Inc. (CGBD) Investor Profile: Who’s Buying and Why?

You're looking at Carlyle Secured Lending, Inc. (CGBD) and asking the right question: who is actually buying this Business Development Company (BDC), and what's their play? The investor profile is defintely not just retail; it's a calculated institutional bet on yield, as evidenced by the fact that institutions own about 24.51% of the stock, holding a total of over 28.84 million shares as of late 2025. This cohort, which includes major players like Creative Planning and Morgan Stanley, is clearly chasing the income stream: the company's Board declared a Q4 2025 dividend of $0.40 per share, translating to a compelling annualized yield around 13.7% based on recent pricing. But here's the quick math that complicates the picture: while Net Investment Income (NII) was $0.38 per share for Q3 2025, the dividend payout ratio sits at a high 135.59%, meaning the distribution is currently exceeding the core earnings. So, how are sophisticated investors like Muzinich & Co., Inc., who increased their position in Q3 2025, reconciling that high payout ratio with the modest 0.4% dip in Net Asset Value (NAV) to $16.36 per share? That's what we need to unpack.

Who Invests in Carlyle Secured Lending, Inc. (CGBD) and Why?

You're looking at Carlyle Secured Lending, Inc. (CGBD) because you need to understand who is buying this Business Development Company (BDC) and what they expect to get out of it. The direct takeaway is that CGBD's investor base is a mix, dominated by income-focused retail investors, but with a significant and growing institutional presence treating it as a high-yield fixed-income proxy.

The core attraction is the high, consistent dividend, but the recent stock price trading at a discount to its net asset value (NAV) has also brought in value-seeking funds. It's a classic BDC investor profile: income first, but with a side of opportunistic value.

Key Investor Types: A Retail-Heavy Foundation

The ownership structure of Carlyle Secured Lending, Inc. (CGBD) is typical for a BDC, leaning heavily toward individual investors, but with substantial institutional backing. As of November 2025, approximately 24.51% of the stock is held by institutional investors and hedge funds. This means the remaining roughly 75% is in the hands of retail investors, company insiders, and smaller funds not required to file 13F reports.

Insider ownership is minimal, standing at just 0.61%, which is a number to watch, but not a major driver of the stock price. The institutional money, however, is serious. These are not passive players; they are asset managers, wealth advisors, and dedicated BDC exchange-traded funds (ETFs) like VanEck Vectors BDC Income ETF (BIZD) and Invesco KBW High Dividend Yield Financial ETF (KBWD).

• Retail Investors: Seek high, predictable quarterly income.
• Institutional Funds: Use CGBD for high-yield credit exposure.
• Hedge Funds: Employ short-term trading and hedging strategies.

For example, Creative Planning is one of the largest institutional holders, with a position of 4,916,335 shares valued at $58,357,000 as of June 30, 2025. That's a significant vote of confidence in the long-term income story.

Here is a quick breakdown of the major institutional holdings as of mid-2025:

Investment Motivations: The Power of Income

The primary motivation for owning Carlyle Secured Lending, Inc. (CGBD) is income. As a regulated investment company (RIC), a BDC must distribute at least 90% of its taxable income to shareholders, which translates into a high dividend yield. For the 2025 fiscal year, the annualized dividend payout is $1.60 per share, resulting in a compelling dividend yield of up to 13.75%. That's a high hurdle for any other asset class to clear.

The company's focus on first lien debt-senior secured loans-is a key factor attracting investors seeking relatively lower credit risk within the high-yield space. The total fair value of the investment portfolio has grown to $2.4 billion as of Q3 2025, demonstrating significant scale. Still, you must be defintely aware that the dividend payout ratio is high at 97% of earnings, meaning the margin for error is thin and dividend growth may be limited in the near-term.

• Dividends: The $1.60 annualized dividend is the main draw.
• Market Position: The Carlyle Group's platform provides strong deal-sourcing capability.
• Value: The stock trades at a discount to its Q3 2025 Net Asset Value (NAV) of $16.36 per share.

The investment thesis is simple: get a high current yield from a diversified portfolio of middle-market loans managed by a top-tier global credit firm. For more on the company's structure, you can read Carlyle Secured Lending, Inc. (CGBD): History, Ownership, Mission, How It Works & Makes Money.

Investment Strategies: Income, Value, and Trading

We see three main strategies at play among CGBD investors. The vast majority of retail holders and many institutional funds are using a long-term holding strategy, treating the stock like a bond to generate consistent cash flow. They are less concerned with short-term price volatility as long as the quarterly dividend of $0.40 per share is maintained. The Q3 2025 Net Investment Income (NII) of $0.37 per share shows how tight the coverage can be, but management has prioritized the dividend.

Next up is value investing. With the stock trading below its book value (NAV), investors are betting on the discount closing over time. Buying a dollar for, say, $0.80 is the classic value play. The third strategy is short-term trading and hedging, primarily employed by hedge funds. The mention of short interest-580.89K shares shorted-indicates that some traders are betting against the stock, likely due to concerns over credit quality or a potential NII decline. This is a way to hedge broader credit exposure or simply speculate on price movements.

Institutional Ownership and Major Shareholders of Carlyle Secured Lending, Inc. (CGBD)

If you're looking at Carlyle Secured Lending, Inc. (CGBD), you're looking at a Business Development Company (BDC) where institutional money plays a huge role. They are the anchor for liquidity and a clear signal of market confidence. The direct takeaway is that institutional investors are currently repositioning, with a significant share accumulation trend in Q3 2025, even as the overall percentage of ownership fluctuates.

As of the most recent filings, institutional investors hold a substantial stake in CGBD, with the total value of institutional holdings estimated at approximately $282 million. This tells you that major financial players see a compelling income-generating opportunity in CGBD's focus on directly originated, first-lien loans to U.S. middle-market companies. The sheer size of these positions means their buying and selling activity is a key driver of the stock's near-term price action.

Top Institutional Investors and Their Holdings

The largest institutional holders of CGBD stock are a mix of major financial institutions and specialized asset managers. These are the firms that have done their homework on the credit quality and dividend sustainability. Here's the quick math: at the end of the second quarter of 2025, three institutions alone held over 9.4 million shares, representing a significant concentration of capital.

The table below shows the top three institutional holders as of June 30, 2025, reflecting the scale of their commitment:

What this estimate hides is the more recent activity. For instance, Muzinich & Co., Inc. was noted as the largest institutional holder as of September 30, 2025, with a position of 499,918 shares, after a substantial increase in their stake during the third quarter. This suggests a rotation among top holders, but the overall institutional appetite remains.

Recent Shifts: Buying, Selling, and the Merger Effect

The third quarter of the 2025 fiscal year saw a clear trend: more institutions were buying than selling. A review of 13F filings as of September 2025 indicated that 23 of 43 filers increased their positions, while only 8 reduced their stake. The aggregate institutional position actually grew by 879.26K shares quarter-on-quarter, which is a strong vote of confidence.

This accumulation is defintely tied to the strategic move to merge with Carlyle Secured Lending III (CSL III), a transaction that completed in the first quarter of 2025. The merger was designed to increase CGBD's scale and liquidity, making it more attractive to large institutional mandates. You see this in the buying: Van Eck Associates Corp, for example, boosted its position by 48.355% as of June 30, 2025, and Muzinich & Co., Inc. increased its holding by 41.774% in Q3 2025. This is a clear signal that the market views the newly scaled entity as a more viable long-term holding.

• Buyers outnumbered sellers in Q3 2025.
• Aggregate institutional shares rose by 879.26K QoQ.
• The CSL III merger was a catalyst for increased institutional interest.

The Impact of Institutional Investors on Stock and Strategy

Institutional investors don't just hold shares; they shape the company's trajectory. For CGBD, their influence is felt in two major areas: stock price stability and strategic direction. Large block trades can create stock price volatility, but the overall institutional presence provides a floor for liquidity, which is crucial for a BDC. Their interest also validates the core investment strategy.

Strategically, the institutional push for scale directly influenced the CSL III merger. The combined entity's total assets are expected to be over $2.5 billion, and the market capitalization is anticipated to exceed $1 billion. This increased size not only attracts more institutional capital but also allows the company to access debt capital markets at a lower cost, which is accretive to Net Investment Income (NII) per share. Also, the exchange of Carlyle's convertible preferred stock for common stock, which was part of the merger, eliminated a potential dilution overhang that may have led to an 8% decrease in quarterly NII per share on a fully diluted basis. That's a direct strategic win for common shareholders, driven by the need to optimize the capital structure for institutional appeal. You can read more about this strategic alignment in the Mission Statement, Vision, & Core Values of Carlyle Secured Lending, Inc. (CGBD).

The bottom line is that institutional money is betting on the long-term benefits of scale and a cleaner capital structure. Your action item here is to monitor the next set of 13F filings for Q4 2025 to see if this accumulation trend continues, especially as the merger's full benefits start to show in the company's financials, where analysts expect CGBD to post $1.97 earnings per share for the current fiscal year.

Key Investors and Their Impact on Carlyle Secured Lending, Inc. (CGBD)

The investor profile for Carlyle Secured Lending, Inc. (CGBD) is dominated by institutional players, which hold a significant 24.51% of the stock, a typical structure for a Business Development Company (BDC). These investors, ranging from large asset managers to specialized hedge funds, are primarily drawn to the BDC's focus on senior secured lending to U.S. middle-market companies and its robust dividend yield.

The largest single institutional shareholder is Creative Planning, LLC, which held 4,916,335 shares as of the second quarter of 2025, representing a 6.74% stake. Other major holders include Morgan Stanley and Prime Capital Investment Advisors, LLC, reflecting a broad base of financial professionals integrating CGBD into diversified income portfolios. This concentration of institutional money means stock movements are often tied to shifts in sector-wide sentiment or large-scale rebalancing, not just company-specific news.

• Creative Planning, LLC: Largest holder with 4,916,335 shares (6.74%).
• Morgan Stanley: A top-tier shareholder, often setting the tone for other large funds.
• Van Eck Associates Corp: Holds a significant stake, often through their BDC-focused ETFs.

Recent Investor Moves: A Mixed Signal on Valuation

We've seen a split in institutional activity during the third quarter of 2025, which is defintely a key signal about current valuation debates. While some funds aggressively bought in, others dramatically reduced their exposure. For example, Qube Research & Technologies Ltd increased its position by 35.6%, lifting its total to 206,966 shares valued at $2,587,000. Also, CANADA LIFE ASSURANCE Co nearly doubled its stake with a 92.4% increase, bringing its total to 88,352 shares valued at $1,143,000.

However, the selling side was just as notable. Prime Capital Investment Advisors, LLC removed its entire holding of 2,204,508 shares in Q3 2025, a massive shift. LSV Asset Management also cut its position by over half, selling 467,113 shares (a 54.3% decrease). This divergence shows a clear disagreement on whether the stock's recent price action, which saw a new 1-year low of $11.63 in November 2025, is a buying opportunity or a sign of deeper trouble.

Insider Confidence and Strategic Influence

Insider buying is often the strongest signal you can get, and CGBD's executives have been putting their own money to work. In August 2025, CFO Thomas M. Hennigan purchased 7,285 shares for $100,168.75. More recently, in November 2025, PAO Nelson Joseph bought 1,500 shares for $17,760. This shows management believes the stock is undervalued, especially following the Q3 2025 earnings miss where the company reported $0.38 EPS against a consensus of $0.39.

The most profound investor influence was seen in March 2025 with the shareholder vote on the merger with Carlyle Secured Lending III (CSL III). Shareholders voted overwhelmingly in favor, with 96% support for the issuance of common stock to complete the deal. This approval was crucial, as the merger was expected to increase the combined company's total assets to over $2.5 billion, providing greater scale and liquidity, which is exactly what institutional investors look for in a BDC. You can read more about the company's foundation and structure at Carlyle Secured Lending, Inc. (CGBD): History, Ownership, Mission, How It Works & Makes Money.

The core influence remains with the external manager, Carlyle Global Credit Investment Management L.L.C., a subsidiary of Carlyle. This structure means the investment strategy is tightly aligned with the broader Carlyle platform, leveraging their deep credit expertise for deal sourcing. The key action for you is to monitor the full-year 2025 EPS, which analysts project at $1.97, to see if management's confidence is justified by the final numbers.

Market Impact and Investor Sentiment

The current investor sentiment toward Carlyle Secured Lending, Inc. (CGBD) is defintely cautious, leaning toward bearish, largely driven by its recent third-quarter 2025 results and a near-term outlook for an earnings slowdown.

The company's stock hit a new 52-week low of $11.63 in November 2025, a clear sign of market anxiety. This drop happened right after the Q3 2025 earnings report showed a slight miss on key metrics and management signaled an 'earnings trough' in the upcoming quarters. While the high dividend yield is attractive, the market is pricing in the risk of that high payout ratio.

Here's the quick math on the recent performance versus expectations:

• Q3 2025 Adjusted Net Investment Income (NII) per share: $0.38 (missed the $0.39 consensus).
• Q3 2025 Revenue: $66.51 million (fell short of the $69.61 million estimate).
• Q4 2025 Quarterly Dividend: $0.40 per share, translating to an annualized yield of 13.7%.

The dividend payout ratio currently sits at a high 135.59%, which is the core reason for investor skepticism about its sustainability, despite the company's commitment to the payout. You can dive deeper into the firm's balance sheet in Breaking Down Carlyle Secured Lending, Inc. (CGBD) Financial Health: Key Insights for Investors.

Recent Market Reactions and Ownership Shifts

Market reaction has been swift and negative following the Q3 2025 earnings, with the stock declining 2.38% to $12.17 immediately after the announcement, trading very close to its 52-week low. That's a direct reflection of investor disappointment over the slight earnings miss and the cautious forward guidance.

However, the company saw a major, positive structural shift earlier in the year. The merger with Carlyle Secured Lending III (CSL III) closed in March 2025, which was overwhelmingly approved by 96% of voting shareholders. This deal was a strategic move to increase scale and efficiency, creating a combined entity with more than $2.8 billion in total assets.

Institutional investors and hedge funds, which collectively own about 24.51% of the stock, have shown mixed signals in the third quarter of 2025. Some major players increased their stake, while others remained on the sidelines:

• Qube Research & Technologies Ltd grew its position by 35.6%, holding 206,966 shares valued at $2,587,000.
• CANADA LIFE ASSURANCE Co increased its holdings by 92.4%, now owning 88,352 shares.
• Caxton Associates LLP lifted its holdings by 63.1%.

Still, the insider activity is a mixed bag. CFO Thomas M. Hennigan bought 7,285 shares in August 2025 for over $100,000, showing management conviction, but a director, John G. Nestor, sold 13,238 shares, cutting his stake significantly. You have to watch what management does, not just what they say.

Analyst Perspectives on Key Investor Impact

The Street's consensus on Carlyle Secured Lending, Inc. is a 'Hold' rating, but the perspectives are fragmented, reflecting the current uncertainty. The average analyst price target is $14.33, suggesting a potential upside from the recent low, but the recent downgrades are the real story.

The merger in March was largely seen as a positive for long-term value, as it eliminated convertible preferred stock dilution risk and brought in $5.0 million in transaction cost relief from Carlyle Investment Management L.L.C. (CIM). The increased scale should eventually help lower financing costs and improve access to diverse debt solutions. But that's a long-term view.

The near-term focus is clearly on the credit quality and the dividend coverage. Analysts are trimming their targets because the earnings miss and the high payout ratio signal pressure on the Net Asset Value (NAV) per share, which stood at $16.36 as of September 30, 2025.

This table shows the recent analyst moves, which tells you everything you need to know about the current risk/reward trade-off:

The key takeaway is that the institutional buying suggests a belief in the long-term benefit of the merger and the high yield, but the analyst cuts reflect a realist's view on the near-term credit and earnings challenges. Your next step should be to monitor the non-accrual rate (investments not generating income), which is a crucial indicator of portfolio health for a Business Development Company (BDC).