What is private credit investing? Private credit — also known as private debt — refers to loans and bonds provided by a non-bank investor, typically a fund. It is the alternative to debt financing from traditional lenders such as commercial banks and bank-led syndicates, and from the public markets such as bonds. Investing in private credit does not involve owning shares in the target company or running its business, unlike private equity investing. That said, some private equity funds hold a small portion of debt, for diversification purposes. Private debt forms an important part of the alternative investment (alts) umbrella, and is often considered lower risk than other alts asset classes. For investors, here are its benefits:

• Lower volatility and diversification benefits
• Better yields than traditional investment-grade debt securities; better risk-adjusted returns
• A good alternative to traditional fixed-income investing

Who are the lenders and borrowers? The investors essentially act as the lenders. The deals are negotiated and transacted directly  ...