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As markets adapt to higher rates and reduced liquidity, ultra-wealthy families are increasingly turning to private credit for stable, secured returns
In a world characterised by volatility and uncertainty, stability has become a prized asset in its own right. For ultra-high-net-worth investors who previously relied on growth and expansion, the current climate of persistent inflation, tighter liquidity, and unpredictable equity markets has led to a strategic shift.
Private credit, the lending of capital directly to businesses outside traditional banking channels, has quietly become one of the most compelling opportunities for those seeking consistency without sacrificing sophistication. Its appeal lies in a simple proposition: reliable income, strong security, and an asset class that performs independently of market swings.
Search for yield in a changing world
For decades, low interest rates made traditional fixed income unattractive, pushing investors towards equities and alternative assets. Now, as central banks normalise monetary policy, credit has regained its prominence.
However, the landscape has shifted. Banks have curtailed their lending capacity due to tighter regulations, leading to a funding gap that private lenders are quick to address. Institutional investors led the way initially, but family offices and UHNW individuals are now increasingly involved through private funds, co-investment vehicles, and bespoke debt structures.
At Aument Capital, we have observed increasing demand from families seeking assets that offer income and downside protection without the volatility of public markets.
What makes private credit different
Private credit covers a wide range, from senior secured loans to mezzanine finance and special situations. The common theme is direct lending, frequently with collateral and covenants that aim to safeguard investors.
Returns are usually generated through interest payments rather than capital growth, making performance easier to predict. During times of market upheaval, this stability becomes essential. Private credit can also enhance portfolio diversification, as returns depend more on borrower performance than on daily market sentiment.
For many families, the appeal is not just in the returns but in having control. The ability to evaluate each opportunity, understand the borrower’s business, and negotiate terms directly resonates with the entrepreneurial mindset that characterises many UHNW investors.
Risk and reward
No investment is without risk, and private credit is no exception. Illiquidity remains a key concern; funds are often locked for several years, and early exits can be challenging. Credit risk also needs careful management through due diligence, diversification, and experienced oversight.
However, with disciplined management and strong underwriting, private credit can deliver resilient performance even in difficult conditions. The sector’s track record through recent market cycles has strengthened its reputation as a defensive yet lucrative allocation for sophisticated investors.
Families are also discovering that private credit complements their wider investment approach. When combined with growth or private equity exposure, it stabilises portfolio dynamics, creating a more solid foundation for long-term planning and intergenerational wealth transfer.
Disciplined return to fundamentals
In many ways, the resurgence of private credit signifies a return to core investing principles: understanding risk, pricing it correctly, and aiming for consistent value creation rather than speculation.
For UHNW families, it offers something increasingly rare: the ability to achieve attractive returns with tangible security and genuine purpose. As global markets continue to evolve, the quiet strength of private credit is proving that, in wealth management, stability is the new form of luxury.
