What is Private Debt?
What is Private Debt?
Private debt is essentially any form of debt that is not issued or traded on a public market. This can include various types of loans, including senior secured loans, mezzanine debt, and subordinated debt. Private debt can be provided by private equity firms, institutional investors, or individual investors. Because private debt is not publicly traded, there can be sometimes be an "illiquidity premium," which is the potential for higher returns in exchange for the illiquidity of the investment.
How Does Private Debt Work?
Key Considerations for Investing in Private Debt:
Consult a Financial Professional
Investing in private debt can be complex and requires a significant amount of due diligence. Investors should consider seeking the advice of a professional financial advisor before investing in private debt. A financial advisor can help you determine your goals, objectives, and risk tolerance, and therefore help determine whether a private debt investment is right for you. Many Chicago Partners clients have private investments that are specifically tailored to their financial goals and objectives, and each investment must be carefully analyzed in order to determine if it is a fit for an investor’s unique financial situation.
Investing in private debt can be an attractive option for those seeking potentially higher returns than traditional fixed income investments, while also diversifying their investment portfolio. However, as with any investment, there are risks associated with investing in private debt, including credit risk, illiquidity, and fees. Investors should carefully consider these risks and seek the advice of a professional financial advisor before making any investment decisions. If you are interested in exploring private debt options, you can use this form to send our advisors a message.
Important Disclosure Information
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