Turning next to the credit part of the term, this refers to debt or a loan. Just like a bond, an investment in private credit is the process of lending money to a private company that in turn pays interest payments on that debt.
However, the private credit asset class will not stay small for long, says Matthew Haertzen, certified financial planner and chief investment officer here at Francis Financial in New York. "You could liken this to a bank offering you a mortgage and they use the home that you are purchasing as collateral, says CFP Avani Ramnani, director of financial planning and investment management at Francis Financial. "The bank is protected if you do not pay your mortgage by being able to take your home.
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