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Retail investors in private credit

Author

Listed:
  • Iñaki Aldasoro
  • Sebastian Doerr
  • Karamfil Todorov

Abstract

Private credit is poised for wider participation from retail investors through the rapid growth of business development companies and, more recently, private credit exchange-traded funds (ETFs). ETFs may introduce price signals that make the opaque private credit market more transparent, especially during downturns when discounts to net asset value could be large and persistent.The rise of retail investment vehicles may also give impetus to the creation of secondary markets for currently illiquid private loans, which could erode the benefits of private credit as an asset class.

Suggested Citation

  • Iñaki Aldasoro & Sebastian Doerr & Karamfil Todorov, 2025. "Retail investors in private credit," BIS Bulletins 106, Bank for International Settlements.
    • Handle: RePEc:bis:bisblt:106
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    References listed on IDEAS

    as
    1. Joern Block & Young Soo Jang & Steven N Kaplan & Anna Schulze, 2024. "A Survey of Private Debt Funds," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 13(2), pages 335-383.
    2. Tobias Adrian & Hyun Song Shin, 2014. "Procyclical Leverage and Value-at-Risk," The Review of Financial Studies, Society for Financial Studies, vol. 27(2), pages 373-403.
    3. Iñaki Aldasoro & Sebastian Doerr, 2025. "Collateralized lending in private credit," BIS Working Papers 1267, Bank for International Settlements.
    4. Fernando Avalos & Sebastian Doerr & Gabor Pinter, 2025. "The global drivers of private credit," BIS Quarterly Review, Bank for International Settlements, March.
    5. Jose M. Berrospide & Fang Cai & Siddhartha Lewis-Hayre & Filip Zikes, 2025. "Bank Lending to Private Credit: Size, Characteristics, and Financial Stability Implications," FEDS Notes 2025-05-23, Board of Governors of the Federal Reserve System (U.S.).
    6. Davydiuk, Tetiana & Marchuk, Tatyana & Rosen, Samuel, 2024. "Direct lenders in the U.S. middle market," Journal of Financial Economics, Elsevier, vol. 162(C).
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