From WSJ.com

Wall Street Races to Bring Private Credit to the Masses

Investing titans are jostling to launch funds made up of hard-to-trade private loans

Money managers are racing to bring the Wall Street craze known as private credit to ordinary investors.

Investment giants including Apollo Global Management, BlackRock, Capital Group, KKR and State Street are jostling to launch private-credit exchange-traded funds and other retail products. The funds would allow anyone to buy into the $1.7 trillion market for loans made by Wall Street’s nonbanks to corporations and consumers.

The winner will be whoever can offer a fund with shares that can be easily bought and sold and get the green light from government regulators. Their prize: full access to mom-and-pop investors when many sophisticated institutions are filling up on private credit.

The toughest problem is how to turn rarely traded portfolios of private loans into shares of funds that individuals can dip in and out of. That is a key requirement for regulators—and a task that many market veterans are skeptical can be achieved.

Without reliable trading, the loans are difficult to value in the best of times, and many warn that such products can react unpredictably to market downturns. It is also unclear whether private credit can keep delivering high returns—around 10% in recent years—as less-sophisticated buyers pile in.

Read the full article at WSJ.com.