Wealth managers may invest in various sub-categories of private debt to diversify their portfolios. Here are some examples:
- Direct lending: Wealth managers can invest in direct lending, which involves loaning capital to an unlisted company or group of companies. This is also known as private credit 1 .
- Corporate loans: Wealth managers can invest in corporate loans, which finance midsize, well-established businesses. This includes senior credit and junior credit strategies 1 .
- Real asset loans: Wealth managers can invest in real asset loans, which finance things such as real estate 1 .
- Private placements: Wealth managers can invest in private placements, which are privately negotiated loans to public companies 1 .
- Business development companies (BDCs): Wealth managers can invest in BDCs, which are publicly traded companies that invest in private companies 2 .
- Infrastructure debt: Wealth managers can invest in infrastructure debt, which provides financing for infrastructure projects such as toll roads, airports, and power plants 2 .
Overall, there are various sub-categories of private debt that wealth managers can invest in to diversify their portfolios. These include direct lending, corporate loans, real asset loans, private placements, BDCs, and infrastructure debt. By investing in a diversified portfolio of private debt, wealth managers can minimize risk and maximize returns.