A new fund hitting the market on Tuesday has a phrase in the title that ETF investors are about to become very familiar with: private credit. The BondBloxx Private Credit CLO ETF (PCMM) debuts Tuesday on the Nasdaq, and it’s part of a broader push to make loans made by non-bank financial firms more easily accessible to every day investors. Private credit has boomed in recent years, as firms like Blackstone and Blue Owl Capital have increasingly replaced banks as the lender for mid-sized companies. There is now a few trillion dollars in private credit assets under management, but the total addressable market for the asset class in the U.S. could top $30 trillion , according to consulting firm McKinsey & Company. More mainstream financial firms are trying to get a piece of that growth, such as asset management giant BlackRock announcing Tuesday that it was buying private credit firm HPS Investment Partners for $12 billion. However, private credit doesn’t trade like traditional corporate bonds do, which makes it tricky to put them in an investor-friendly wrapper like an ETF because of liquidity issues. The use of collateralized debt obligations, which pool a bunch of private credit loans together, is one approach.
