Article: Predictions for 2025 by Nate Eisenberg, Product Manager – Credit Markets, Allvue

Private credit is expanding beyond institutional and high-net-worth investors, increasingly attracting retail investors through new vehicles like private credit ETFs and tokenized funds. However, with this growth comes unique challenges, particularly around valuation risks, transparency, and capital deployment.

Key Trends and Challenges:

• Retail Investor Access: Private credit ETFs and tokenized funds are making private credit more accessible, but fund managers must navigate liquidity and reporting complexities.
• Valuation Risks: Illiquid assets present challenges such as opaque pricing, thin markets, and inconsistent data compared to traditional liquid asset classes.
• Investor Reporting Demands: Standardized reporting frameworks are crucial as investors seek greater transparency, particularly given private credit’s higher-leverage nature.
• Capital Deployment Strategies: Unlike institutional investors, retail capital requires upfront funding, forcing fund managers to balance efficient capital deployment with risk management.
• AI & Automation:
  • While AI adoption remains cautious, reporting automation will continue to evolve in 2025.
  • According to Allvue Systems’ GP Outlook Survey, 42% of GPs plan to adopt AI or machine learning within the next two years.
  • AI solutions must be flexible to meet the unique data demands and regulatory requirements of private markets.

Explore how private credit is evolving and how fund managers are preparing for the future in Nate Eisenberg’s latest insights. Read the full article here.