Private credit has been gaining traction among investors looking to broaden their portfolios beyond traditional stocks and bonds. Once reserved for institutional investors and ultra-high-net-worth individuals, this asset class is now more accessible to a broader audience, thanks to evolving fund structures and emerging investment platforms. But what is private credit, and how does it fit into a thoughtful, diversified portfolio? 

What Is Private Credit? 

Private credit refers to lending that occurs outside of the traditional banking system. These loans are not publicly traded like corporate or government bonds. Instead, they’re privately negotiated between investors and borrowers, which are typically businesses that need capital for growth, expansion, or financial recovery. There are several types of private credit strategies, including: 

  • Direct Lending: Loans made to mid-sized companies, often to support operations or growth when bank financing isn’t a fit. 
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