At a private markets conference focused on the ultra-rich in London this week, the typically discreet sector was notably candid about its growing interest in private credit.
“We like selective parts of alternative credit,” said Harinder Hundle, managing partner of multi-family office Hundle, on a panel at the London Private Markets Meeting. “We can see it generates yield and income for investors and that’s great in the current environment.”
Family offices represent a vast pool of capital — around $3.1 trillion globally as of 2024 — and are increasingly seeking new sources of returns as private equity distributions slow. Private credit, unlike PE, doesn’t rely on an exit to return money, but rather, throws cash off regularly through quarterly or even monthly interest payments. The burgeoning $1.6 trillion asset class is expanding its sources of cash as traditional buyers, including pension funds and endowments, become fully allocated to the sector.
Posing less risk than an equity portfolio, private credit funds are also producing high single digit returns, according to the Cliffwater Direct Lending Index, just shy of the roughly 10% performance of the S&P 500, according to data compiled by Bloomberg.
Family offices also typically have a buy-and-hold mentality, making them comfortable with an illiquid asset class like private credit. Volatility in public markets is also increasing the appeal of privately-held assets.
There’s plenty of room for rich families to increase their exposure. In a November 2024 survey by BNY Wealth, single family offices reported allocating more than one quarter of their portfolios to private equity — the largest share among asset classes. Private credit didn’t make the top three.
To be sure, the influx of capital doesn’t come without concerns, as firms worry about the huge sums of capital the largest PE asset managers have amassed. “We think that’s potentially a material problem in financial markets,” said Hundle. “There’s so much crossover between managers on the largest deals so I worry about the closed environment of these deals.”
Nevertheless, the overall direction of travel for the ultra-rich is clear. The 2025 BlackRock Family Office Survey shows a third of respondents wanted to increase their allocations to private credit, the highest of any asset class.
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