Private Credit Exposure Without the Lockups | Mike O'Brien, Hilton Capital

Fifteen minutes with Brad Roth, founder and CIO of THOR: https://thorft.com/call?s=youtube Mike O'Brien, co-portfolio manager at Hilton Capital Management, built the first pure-play BDC bond ETF. The fund owns the bonds business development companies issue to fund their lending, not the private loans themselves. He explains what the statutory leverage limit protects, where these bonds sit in the capital structure, and why advisers keep confusing his fund with BDC equity. HBDC holds senior unsecured bonds issued by business development companies, the lenders that filled the gap left by banks after the 2008 financial crisis. The fund tracks a custom index built with Solactive that caps the two largest issuers at 10%, the next largest at 8%, the following two at 7%, and everyone else at 5%, deliberately overweighting smaller BDCs to capture extra spread. All bonds must have a minimum issuance size of $250 million to avoid illiquidity. Mike says the portfolio is currently overwhelmingly investment grade, although the index carries no investment grade mandate. Mike is straightforward about where these bonds move differently. By his firm's analysis, the beta on BDC bonds relative to investment grade corporates is about 1.4, meaning if IG spreads blow out 100 basis points, BDC bonds would gap out about 140. He does not position HBDC as a core bond replacement. The use case is adviser portfolios carrying interval funds or non-traded BDCs with lockups and 2% management fees. HBDC charges 39 basis points, trades daily, and carries no redemption gates. The fund launched in June 2025 and recently received an NAIC 2C rating, which opens it to insurance company portfolios. CHAPTERS 0:00 Private credit, one step removed 1:02 Mike O'Brien intro 1:57 From restructuring to investing 3:52 Joining Hilton Capital 5:50 What HBDC actually owns 7:32 How BDC bonds differ from private credit 9:22 Statutory leverage limits and the equity cushion 11:02 Index design and issuer caps 13:02 Where BDC bonds sit in the capital structure 15:02 ETF liquidity vs the underlying bond market 16:37 What advisers ask first 17:52 Fighting the private credit fear cycle 19:37 How advisers should use HBDC 21:17 Where to learn more WHO THIS EPISODE IS FOR Advisers allocating to alternatives, private credit, or income sleeves who want liquid BDC bond exposure without lockups. Also relevant for anyone replacing interval funds or non-traded BDCs in client portfolios. ABOUT THE GUEST Mike O'Brien, CFA, is co-portfolio manager at Hilton Capital Management. He co-manages HBDC with the firm's CIO and also runs its tactical income and dividend yield strategies. Before Hilton, he was a VP and sell-side equity analyst at Wolfe Research covering special situations, and he started his career in restructuring at FTI Consulting. LINKS Episode page and full write-up: https://thorft.com/podcast/private-cr... Listen on Spotify: https://open.spotify.com/show/1TJpgOA... Listen on Apple Podcasts: https://podcasts.apple.com/us/podcast... ABOUT BEHIND THE TICKER Behind the Ticker is the weekly conversation with the people who actually build and run ETFs. Every episode goes past the fact sheet: what the strategy does, why it was built that way, where it struggles, and how an adviser should think about using it. New episode every week. Subscribe for a new ETF manager every week:    / @bradroth   Brad Roth is Founder and Chief Investment Officer of THOR Financial Technologies. THOR Funds | NYSE Listed Website: https://thorft.com The Signal, our daily market note: https://thesignal.thorft.com Nothing in this episode is investment advice or a recommendation to buy or sell any security. Guests discuss their own products. Views are their own. #BDCBonds #FixedIncomeETF #PrivateCredit #ETFEducation #BehindTheTicker