Strategy
Private Credit
Yield without the duration risk of long bonds.
When rates spike, long bonds get hammered. Private credit (direct lending to middle-market businesses, often at floating rates) gives you the yield without locking in the duration risk. That's why institutional desks have been quietly rotating toward it for a decade.
Where you sit in the stack
No stress applied yet; every layer is whole, senior included.
Illustrative structure. Real deals differ, and senior does not mean risk-free: defaults, recoveries, and illiquidity are the trade.
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The play
Allocate to private-credit vehicles that lend directly to middle-market borrowers at floating-rate spreads above SOFR. Yields typically run 7–11% net to investors. Because the underlying loans reset with rates rather than fixed-coupon at issue, the duration profile is short, meaning the portfolio doesn't get crushed when rates rise the way long bonds do.
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Worked example
A retiree with a $500K bond allocation watched it lose meaningful value in the 2022 rate-rise. Reallocating a portion (say $150K) into a private-credit vehicle yielding 9% generates $13.5K/year in income, against an asset whose price is far less rate-sensitive than the long bonds it replaced.
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Who it works for
Accredited investors who need yield and want diversification away from rate-sensitive public fixed income. Best sized as part of a broader income strategy, not a standalone position.
Common questions
Is private credit safe?
It carries credit risk: the borrowers can default. Diversified vehicles with experienced underwriters have historically held up well even through credit cycles, but losses are possible.
What's the liquidity?
Most vehicles offer quarterly or semi-annual redemption windows with notice. It's not as liquid as a public bond ETF; it's not as locked up as private equity either.
How is the income taxed?
Generally as ordinary income, similar to interest from a bond. We can often locate the position in tax-advantaged accounts when it makes sense.
Related
Adjacent work that often runs alongside this.
Service
Alternative Investments Access →
Private credit and real estate, where you qualify.
Service
Retirement Income Planning →
Income that shows up whether the market is up or down.
Strategy
Income-Engineered Portfolios →
A ~6% income sleeve so you never sell stock at the wrong time.
Strategy
Private Real Estate →
Real-estate deals most advisors never bring up.
Most clients leave their first call with something their last advisor never gave them: a plan.
Thirty minutes. No prep needed. We'll walk through your situation and tell you what we'd do differently.