Private Credit Secondaries
In the increasingly competitive and complex landscape for private credit allocations, private credit secondary strategies allow investors to achieve exposure to a diversified portfolio of high-quality deals via a single investment with the added benefit of potentially higher returns.
Secondaries are a critical release valve
Since 2014, the private credit asset class has experienced tremendous growth, with projections forecasting the space to reach $3 trillion by 2028.1
As private credit has evolved and become a larger allocation across institutional investors, a natural byproduct has emerged: a secondary market that allows investors to transact existing loan portfolios as a whole or in specific parts. This growing market offers a powerful tool for enhancing portfolio liquidity, managing risk, and accessing seasoned credit assets.
What are private credit secondaries?
Private credit secondaries are transactions where investors transfer ownership of various exposures—whether interests in funds, individual loans, or portfolios—before they reach maturity.
Investors can sell positions in certain funds or strategies where they are overweight and redeploy capital into others that better match their current portfolio objectives. At the same time, new entrants to private credit can use secondaries to establish exposure more quickly, bypassing long fundraising cycles and J-curves. Against this backdrop, the secondary market has become a critical release valve, offering limited partners a path to liquidity and giving buyers access to seasoned portfolios with attractive yields.
What are the potential benefits of secondaries?
Secondaries add a distinct layer of potential benefits
AllianzGI Partnership
As the private credit secondaries universe becomes increasingly competitive, access to off-market and bilateral transactions is a critical component of securing discounts and increasing the probability of hitting return thresholds. As one of the largest private credit platforms in the world, Allianz has a distinct advantage in sourcing secondary market deals.
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We welcome the opportunity to discuss how a private credit secondary strategy aligns with your strategic asset allocation. Please contact our team to learn more.
Voya Investment Management LLC (“Voya”) and Allianz Global Investors GMBH (“AGI”) have entered into a Distribution Agreement (the “Agreement”) under which Voya and AGI market each others’ strategies and solicit clients on each others’ behalf (the “Services”). As part of Voya’s services under the Agreement, Voya and its personnel may make favorable statements regarding AGI and its products and services. Because Voya is not a current client of AGI or investor in a fund sponsored by AGI, such statements constitute “endorsements” for purposes of Rule 206(4)-1 under the Investment Advisers Act of 1940. Under the Agreement, in exchange for its services (including making such endorsements), Voya will receive cash compensation from AGI, consisting of up to 52.6% of the annual investment management fee received by AGI from any clients solicited by Voya. This compensation gives Voya a conflict of interest because it incentivizes Voya to recommend AGI.
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