Unlocking the Value of Private Credit: A Look at Goldman Sachs’ Global Insurance Survey and a New ETF Solution for Retail Investors

Goldman Sachs recently released its 13th annual Global Insurance Survey, shedding light on the growing interest in private credit among insurance companies. With concerns about an economic slowdown and declining interest rates, insurance companies are turning to private credit as a way to improve resiliency and increase yield.

Private credit, which involves non-bank lending directly to companies, offers several advantages, including attractive returns, diversification, income generation, direct lending opportunities, and protection in downturns. To provide retail investors with access to this asset class, Accelerate Financial Technologies Inc. launched Canada’s first private credit ETF, the Accelerate Diversified Credit Income Fund (Ticker: INCM).

The INCM Fund aims to deliver exposure to alternative income sources by focusing on the private credit and direct lending market. With a target yield of 10%, paid monthly, the Fund offers investors the opportunity to invest in a diversified portfolio of senior secured floating-rate loans to private middle market companies. This exposure is obtained through allocations to top-tier U.S. private credit managers acquired through the secondary market.

Julian Klymochko, CEO and Chief Investment Officer of Accelerate, highlighted the value proposition of the INCM Fund, stating that private credit has compelling tailwinds in a high-interest rate environment. The Fund provides liquidity through an ETF structure with no gating risk and credit diversification through exposure to more than 4,000 direct loans.

While private credit is gaining traction among institutional investors, individual investors may also find value in this asset class. With its potential for higher yields, diversification benefits, and downside protection, private credit could be a valuable addition to an investment portfolio. However, it is crucial to seek advice from a registered financial professional before making any investment decisions.