Eric Lloyd
About Eric Lloyd
Eric Lloyd is Chief Executive Officer and Executive Chairman of Barings BDC, Inc. (BBDC), and President of Barings LLC. He is an “Interested Director” of BBDC, age 56, serving on the Board since August 2018; he will resign as CEO effective December 31, 2025 while continuing as Executive Chairman. He holds a B.S. in Finance from the University of Virginia and has over 30 years of experience across investment management, investment banking, leveraged finance, and risk management. Recent company performance under his leadership reflects stable NAV and strong net investment income with industry-low nonaccruals, supported by Barings’ credit platform.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Barings LLC | President | Since 2021 | Leads cross-asset investment teams and corporate strategy; oversight across private and public credit platforms |
| Barings LLC | Global Head of Private Assets | 2020–2021 | Managed global private markets businesses and platform integration |
| Barings LLC | Deputy Head of Global Markets & Head of Private Fixed Income | 2019–2020 | Led private fixed income execution and markets coordination |
| Wells Fargo (incl. Wachovia) | Head of Market & Institutional Risk; Board member of Wells Fargo Securities; Head of Global Leveraged Finance at Wachovia | Pre-2013 | Enterprise risk leadership; leveraged finance origination and underwriting platform build-out |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Barings Capital Investment Corporation (BCIC) | Director (since 2020); Chairman | Since 2021 | Affiliate closed-end BDC |
| Barings Private Credit Corporation (BPCC) | Director; Chairman | Since 2021 | Affiliate non-listed BDC |
Fixed Compensation
| Component | BBDC Disclosure | 2024 Amount | Notes |
|---|---|---|---|
| Executive salary/bonus paid by BBDC | Not applicable (externally managed; executives are Barings employees) | — | “Executive officers do not receive any direct compensation from the Company.” |
| Director fees (Interested Directors) | None | $0 | Interested Directors, including Eric Lloyd, received no Board compensation from BBDC in 2024 |
| Independent Director annual retainer (context) | $120,000 (2024); moves to $150,000 (2025) | $120,000 (2024) | Lead Independent Director and Audit Chair received +$10,000 in 2024; +$20,000 in 2025 |
Performance Compensation
Because BBDC is externally managed, executive pay is at Barings. Alignment for shareholders is primarily through BBDC’s advisory fee structure.
| Fee Component | Structure | 2024 Amount | Alignment Considerations |
|---|---|---|---|
| Base Management Fee | 1.25% of average gross assets (excluding cash and equivalents) at prior two quarter-ends | $32.4 million | Incentivizes asset growth and leverage; payable regardless of performance |
| Income-Based Incentive Fee | Based on pre-incentive fee net investment income exceeding hurdle rate | $23.8 million | Rewards NII generation; leverage can increase odds of meeting hurdle rate |
| Capital Gains Fee | Based on cumulative annual net capital gains | $0 | Encourages realized gains; no hurdle rate |
Note: Management has emphasized the BBDC hurdle rate is among the highest of listed BDCs, reinforcing discipline in incentive fee realization.
Equity Ownership & Alignment
| Holder | Shares Beneficially Owned | % of Class | As-of Date |
|---|---|---|---|
| Eric Lloyd | 38,512 | <1% | March 7, 2025 |
| Eric Lloyd (prior year) | 33,437 | <1% | March 6, 2023 |
| Barings LLC | 13,639,681 | 12.9% | March 7, 2025 |
Policies impacting alignment and trading pressure:
- Pre-clearance required for trades; quarterly and event-specific blackout periods apply .
- Prohibitions: short-term opposite-way trades within 6 months, short sales, options/derivatives, hedging/monetization transactions; pledging/margin generally prohibited except by pre-approval from Chief Compliance Officer .
- These restrictions reduce near-term insider selling pressure and limit misalignment via hedging or pledging.
Employment Terms
| Aspect | Disclosure |
|---|---|
| Board service | Director since August 2018; Executive Chairman; “Interested Director” due to Barings affiliation |
| CEO tenure | CEO since December 16, 2022; will resign as CEO effective December 31, 2025, continuing as Executive Chairman |
| Contracts/severance/change-of-control | No executive employment contract, severance or CoC terms disclosed by BBDC (executives compensated by Barings) |
| Clawbacks | Clawback specifics not disclosed; governed under Barings Global Code and BBDC compliance framework |
Board Governance
- Structure: 9 directors, 7 independent; Eric Lloyd serves as Executive Chairman; Thomas Okel is Lead Independent Director .
- Committees:
- Audit: Chair Mark Mulhern; members include Mulhern, Okel, Switzer, Knapp, Byers, Olmstead, Lancaster-Beal; all independent; Mulhern is “audit committee financial expert” .
- Compensation: Chair Jill Olmstead; all independent; executives not compensated by BBDC .
- Nominating & Corporate Governance: Chair Thomas Okel; all independent .
- Meetings and attendance: 2024 Board met 5 times; committees met periodically; no director attended less than 75% of meetings .
Dual-role implications:
- CEO + Executive Chairman concentration mitigated by Lead Independent Director and majority-independent Board structure; independent committees oversee compensation, audit, and nominations .
Company Performance Under Lloyd’s Tenure
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Net Asset Value (end-of-period, $/share) | $10.99 | $11.36 | $11.05 | $11.28 | $11.29 |
| Net Investment Income (per share) | $0.64 | $0.90 | $1.12 | $1.19 | $1.24 |
| Total Return (%) | -2.17% | 29.34% | -18.35% | 18.83% | 24.05% |
Quarterly highlights:
- Q1 2024: NAV/share $11.44; NII $0.28; nonaccruals 0.3% FV; dividend $0.26 .
- Q2 2025: NAV/share $11.18; NII $0.28; nonaccruals ~0.5% FV; pipeline building; supplemental dividends plan .
Portfolio transition:
- Barings-originated positions increased to 95% of portfolio FV by Q2 2025 (from 76% in 2022), with legacy MVC/Sierra assets reduced and supported by credit support agreements .
Related-Party Transactions and Conflicts
- Advisory Agreement (Barings): Base fee $32.4m (2024); income-based fee $23.8m (2024). Administration expenses reimbursed ~$2.0m (2024) .
- Credit Support Agreements: Up to $23.0m (MVC portfolio) and up to $100.0m (Sierra portfolio) over 10 years, excluded from incentive fee calculations; mitigate downside on acquired portfolios .
- Notes held by MassMutual (Barings’ parent): Certain series of company notes held by MassMutual and subsidiaries, e.g., $25m Series B, $25m Series D, $50m Nov 2026 Notes, $25m Feb 2029 Notes .
- Co-investment exemptive relief governs joint transactions; allocation policies address overlapping opportunities across affiliated vehicles .
Compensation Committee Analysis
- Committee comprised entirely of independent directors; authority to engage independent consultants; no executive compensation report produced since executives are not compensated by BBDC .
Performance Compensation – Detailed Mechanics
| Metric | Weighting | Target/Hurdle | Actual (2024) | Payout Basis | Vesting |
|---|---|---|---|---|---|
| Pre-Incentive Fee NII | Not disclosed | Hurdle rate (not quantified) | Incentive fee of $23.8m | Quarterly calculation per Advisory Agreement | Not applicable (fees) |
| Capital Gains | Not disclosed | N/A (no hurdle) | $0 (no capital gains fee) | Annual cumulative net capital gains | Not applicable (fees) |
| Base Fee on Gross Assets | Not applicable | 1.25% of average gross assets (ex-cash) | $32.4m | Quarterly accrual based on asset base | Not applicable (fees) |
Director Compensation (for completeness)
| Independent Director | Fees Earned (2024) | Notes |
|---|---|---|
| Mulhern | $130,000 | Audit Chair and Lead Ind. Director premiums included |
| Okel | $130,000 | |
| Olmstead | $120,000 | Compensation Chair |
| Switzer | $120,000 | |
| Knapp | $120,000 | |
| Byers | $120,000 | |
| Lancaster-Beal | $120,000 |
Interested directors (including Eric Lloyd) received no Board compensation from BBDC in 2024.
Risk Indicators & Red Flags
- Fee incentives may encourage leverage and pursuit of higher-yield strategies; base fee payable regardless of performance and calculated on gross assets; Income-Based Fee can incentivize leverage to meet hurdle; Capital Gains Fee may bias toward gains realization .
- Co-investment and affiliated-vehicle conflicts exist; mitigated via exemptive relief and allocation policies .
- Hedging and pledging of BBDC stock are prohibited, with limited pre-approved exceptions; pre-clearance and blackout policies reduce trading risks .
- Governance mitigants: majority-independent Board; Lead Independent Director; independent committee leadership .
Investment Implications
- Alignment: Eric Lloyd’s direct shareholding is modest (<1%), but Barings’ 12.9% ownership and high hurdle rate help align adviser incentives with shareholders; trading policies limit hedging/pledging misalignment.
- Execution and credit quality: Low nonaccruals and consistent NII/NAV stability support dividend sustainability; continued rotation from legacy MVC/Sierra assets reduces risk, with credit support agreements lowering downside.
- Governance: CEO + Executive Chairman concentration is offset by strong independent oversight; upcoming CEO transition on Jan 1, 2026 introduces modest leadership transition risk but continuity maintained via Executive Chair role.
- Fees: Base and incentive fees are material and can incentivize leverage; investors should monitor asset growth versus NII quality and leverage metrics.