Private Credit Leans on Secondaries as Investor Payouts Dwindle

Private credit firms are selling stakes of loan portfolios as a way to boost a closely watched measure of how much cash they return to investors such as pension funds and insurance companies.

Lenders have been forced to hold onto their investments for longer, given a lack of mergers and acquisitions has led to fewer opportunities to cash out. As a result, funds are paying out less to investors that have been eager to get their money back before committing to new vehicles.