In a landscape marked by evolving investor preferences, private credit managers are actively refining their fund structures to better align with the growing appetite for liquidity, co-investment, and customized solutions. This insight comes from the latest research, "Trends in Private Credit Fund Structuring 2025," conducted by the Alternative Credit Council (ACC) in collaboration with law firm Dechert.
The report draws data from 50 private credit managers collectively managing approximately $1.5 trillion in assets. It reveals that as the market matures, fund designs are increasingly accommodating the needs of institutional, retail, and insurance investors. One of the most striking findings is the surge in demand for co-investment opportunities, with 92% of managers reporting increased interest from investors, a notable rise from around 70% in 2023.
Additionally, liquidity demands are on the rise, with 64% of managers acknowledging a stronger need for liquidity solutions. Notably, two-thirds of these managers now offer at least one fund vehicle with periodic redemption options, a significant increase from half of the managers in the previous year. Leverage usage remains conservative, typically ranging from 1.0 to 1.5 times net asset value (NAV), and is strategically targeted at specific assets or funds.
The report also highlights a growing participation from retail investors, with more than half of the surveyed managers catering to high-net-worth individuals and actively seeking retail capital for new fund offerings. Furthermore, insurance allocations are increasingly facilitated through rated note feeders, with 63% of managers considering this approach for U.S. insurers and 35% for their European and Asian counterparts.
Trusted domiciles for fund structuring continue to be Luxembourg, Cayman Islands, the United States, and Ireland. Many managers are also creating parallel vehicles designed to meet diverse investor preferences. The report emphasizes the importance of fee innovation, with approximately two-thirds of managers adopting tiered management fee schedules and other flexible models to stay competitive in fundraising.
Jiřà Król, Global Head of the ACC, remarked, "Our new research shows the importance of structuring for investors in private credit – adding value while also allowing investors to tailor their exposure and manage risks. Investor demand for liquidity and co-investment is being met by private credit managers who take the same long-term outlook to their product design as they do to their investments."
Claire Bentley, a Partner at Dechert, emphasized that effective fund structuring is crucial to the evolution of private credit. She stated, "Managers who can offer enhanced liquidity, including evergreen vehicles, alongside customized products, flexible fee models, and co-investment opportunities are positioning themselves to meet the nuanced demands of institutions, insurers, and high-net-worth clients. Our research shows that those who master these tools can expand their investor base without sacrificing the reliable returns that define the asset class."
As private credit continues to evolve, the strategic focus on meeting diverse investor needs will likely lead to more innovative and flexible fund structures, ultimately shaping the future of this asset class.