$2 trillion. That’s the near-term projected growth for the private credit market, and it’s at the lower end of some estimates. So, we can all agree that there’s immense opportunity in this space, but how can financial services firms grab the reins and make the most of it? They’ll need to build trust with their audience, the next generation of advisors and investors, if they want to play a leading role in this rising asset class—which means understanding the optimal roles they can play in this new dynamic.
For investors and advisors in the know, private credit can help power their portfolios with new avenues for income generation as well as added diversification to better balance risk. But first, there needs to be careful, time-consuming research conducted to determine the right application, allocations and product mixes to employ. As time is scarce for this group, they will look for trusted experts out in the market to help navigate this trending asset class. The firms that step up to provide clear and efficient educational resources and insights will earn the attention of this time-strapped group.
To provide the needed expertise, brands are transforming their websites into resource centers with personalized experiences for advisors and investors—providing content that spans the learning curve. As an example, State Street provides their users with a 9-minute comprehensive introduction to private credit. BlackRock has a dedicated Advisor Center within their website providing everything from education to weekly market commentary to analysis tools.
Another role that financial brands can play to garner trust is as a convener. Even among the younger generations of advisors and investors, many prefer live, human touchpoints. For private credit, where new use cases, participants, and deal structures continue to emerge, events and forums are an efficient way for the industry to connect, share, and learn from each other. While industry groups currently lead this charge, individual brands have an opportunity to become their own conveners—using their platform to nurture and inform the next generation.
Private Credit will continue to grow and evolve at a breakneck pace, and advisors and investors are racing to take advantage. The financial services brands that participate in educating on these new and trending asset classes will earn the respect, credibility and assets of their investors.