BondBloxx Is Launching the First ETF Providing Direct Exposure to Private Credit
BondBloxx is launching the BondBloxx Private Credit CLO ETF (PCMM), the first ETF offering direct exposure to private credit, on December 3rd. The fund invests at least 80% of its assets in private credit collateralized loan obligations (CLOs), targeting middle market companies. This segment represents over $30 trillion in the U.S. financial markets, with approximately 300,000 middle market companies generating $13 trillion in annual revenue.
The ETF aims to democratize access to private credit, previously to institutional and high net worth investors, offering portfolio diversification through multiple underwriters with the liquidity and transparency advantages of an ETF structure.
BondBloxx lancia il BondBloxx Private Credit CLO ETF (PCMM), il primo ETF che offre un'esposizione diretta al credito privato, il 3 dicembre. Il fondo investe almeno l'80% dei suoi attivi in obbligazioni garantite da prestiti nel credito privato (CLO), con l'obiettivo di aziende di mercato intermedio. Questo segmento rappresenta oltre 30 trilioni di dollari nei mercati finanziari statunitensi, con circa 300.000 aziende di mercato intermedio che generano 13 trilioni di dollari di fatturato annuo.
L'ETF mira a democratizzare l'accesso al credito privato, precedentemente riservato a investitori istituzionali e ad alto patrimonio netto, offrendo un diversificazione del portafoglio attraverso molteplici assicuratori, con i vantaggi di liquidità e trasparenza di una struttura ETF.
BondBloxx lanza el BondBloxx Private Credit CLO ETF (PCMM), el primer ETF que ofrece exposición directa al crédito privado, el 3 de diciembre. El fondo invierte al menos el 80% de sus activos en obligaciones de préstamos garantizados por crédito privado (CLO), enfocándose en empresas del mercado medio. Este segmento representa más de 30 billones de dólares en los mercados financieros de EE. UU., con aproximadamente 300,000 empresas del mercado medio que generan 13 billones de dólares en ingresos anuales.
El ETF tiene como objetivo democratizar el acceso al crédito privado, anteriormente reservado para inversores institucionales y de alto patrimonio, ofreciendo diversificación de cartera a través de múltiples aseguradores, con las ventajas de liquidez y transparencia de una estructura ETF.
BondBloxx는 12월 3일에 사모 신용에 직접적으로 노출되는 최초의 ETF인 BondBloxx Private Credit CLO ETF (PCMM)를 출시합니다. 이 펀드는 최소 80%의 자산을 사모 신용 담보 대출 의무(CLO)에 투자하여 중간 시장 기업을 목표로 합니다. 이 세그먼트는 미국 금융 시장에서 30조 달러 이상을 차지하며, 약 30만 개의 중간 시장 기업이 연간 13조 달러의 수익을 창출하고 있습니다.
이 ETF는 이전에 기관 및 고액 자산가 투자자에게만 제공되던 사모 신용 접근을 민주화하여, 여러 보증인을 통한 포트폴리오 다각화와 ETF 구조의 유동성 및 투명성 이점을 제공합니다.
BondBloxx lance le BondBloxx Private Credit CLO ETF (PCMM), le premier ETF offrant une exposition directe au crédit privé, le 3 décembre. Le fonds investit au moins 80 % de ses actifs dans des obligations de prêt garanties par des crédits privés (CLO), ciblant les entreprises de taille intermédiaire. Ce segment représente plus de 30 billions de dollars sur les marchés financiers américains, avec environ 300 000 entreprises de taille intermédiaire générant 13 billions de dollars de revenus annuels.
L'ETF vise à démocratiser l'accès au crédit privé, auparavant réservé aux investisseurs institutionnels et fortunés, offrant une diversification de portefeuille à travers plusieurs souscripteurs avec les avantages de liquidité et de transparence d'une structure d'ETF.
BondBloxx führt am 3. Dezember den BondBloxx Private Credit CLO ETF (PCMM) ein, den ersten ETF, der direkte Exponierung gegenüber privatem Kredit bietet. Der Fonds investiert mindestens 80% seiner Vermögenswerte in durch private Kredite gesicherte Schuldverschreibungen (CLOs) und zielt auf mittelständische Unternehmen ab. Dieses Segment macht über 30 Billionen Dollar der US-Finanzmärkte aus, wobei etwa 300.000 mittelständische Unternehmen jährlich Einnahmen von 13 Billionen Dollar generieren.
Der ETF hat das Ziel, den Zugang zu privatem Kredit zu demokratisieren, der zuvor nur institutionellen und vermögenden Investoren vorbehalten war, und bietet Portfolio-Diversifizierung durch mehrere Underwriter mit den Vorteilen von Liquidität und Transparenz einer ETF-Struktur.
- First-mover advantage in private credit ETF market
- Provides access to $30 trillion private credit market
- Targets middle market segment representing one-third of U.S. private sector GDP
- Offers diversification across multiple CLO underwriters
- Provides ETF benefits (liquidity, transparency, cost efficiency) to previously restricted asset class
- 80% concentration in CLOs presents sector-specific risks
- New, untested ETF structure in private credit market
Insights
The launch of PCMM represents a significant milestone in democratizing private credit access through the ETF structure. With private credit markets exceeding
The structure provides several advantages over traditional private credit investments, including daily liquidity, transparent pricing and lower investment minimums. The multi-manager approach, allowing CLO investments from various underwriters, enhances diversification and reduces single-manager risk. The 80% allocation requirement to private credit CLOs ensures focused exposure to this asset class while maintaining some flexibility in portfolio management.
This product launch marks a transformative development in ETF market structure, potentially catalyzing broader retail participation in private markets. The ability to package relatively illiquid private credit investments in a liquid ETF wrapper demonstrates continued innovation in fund structuring. Key considerations include the potential impact on private credit market dynamics, liquidity management in stress scenarios and price discovery mechanisms.
The involvement of Macquarie Asset Management as sub-adviser adds institutional credibility and private markets expertise. The focus on middle market exposure, representing one-third of U.S. private sector GDP, provides strategic access to a important segment of the economy previously difficult for retail investors to access.
PCMM ETF democratizes access to middle market loans, which have previously been available primarily to large institutional investors
Private credit is a fast-growing segment of the
The BondBloxx Private Credit CLO ETF (PCMM) provides direct exposure to private credit middle market companies. There are approximately 300,000 middle market companies in the
“With the launch of PCMM, investors can now access private credit with an ETF,” said Leland Clemons, Founder and CEO of BondBloxx. “The ETF industry has been a force of continuous innovation for investors, and I am proud that BondBloxx is a leader in that innovation in fixed income. We’re thrilled to bring private credit to ETFs, and we look forward to redefining what is possible in fixed income ETFs.”
PCMM invests at least
“The portfolio diversification offered by private credit exposure is a key aspect of this new fund, but just as important is the diversified nature of the fund’s holdings themselves. By not limiting the universe of private credit opportunities to a single underwriter, PCMM is better equipped to provide investors with opportunities across the entire
“This new ETF leverages our expertise in private markets investing to meet the client demand for access to private credit exposures,” said Vivek Bommi, Head of Leveraged Credit at Macquarie Asset Management, which acts as the fund’s sub-adviser. “The launch marks a significant step in expanding access to private credit and reinforces our commitment to delivering compelling outcomes for investors.”
BondBloxx points to several potential use cases for the exposure offered by PCMM, including:
- As a strategic allocation in portfolios to seek enhanced returns and increased diversification
- As a complement to broader credit in fixed income allocations, to include both public and private corporate bonds
- As the liquid portion of private credit and alternatives allocations
“The use cases are many and now, for the first time, all investors have access to private credit as a portfolio building block,” added Clemons. “We’re very pleased to be adding PCMM to our lineup of innovative income-generating solutions.”
About BondBloxx
BondBloxx Investment Management Corporation (“BondBloxx”) is the first ETF issuer to focus solely on fixed income, offering a range of exposures spanning
Disclosures
Carefully consider the Funds’ investment objectives, risks, charges, and expenses before investing. This and other information can be found in the Funds’ prospectus or, if available, the summary prospectus, which may be obtained by visiting bondbloxxetf.com/prospectuses. Read the prospectus carefully before investing.
There are risks associated with investing, including possible loss of principal. Fixed income investments are subject to interest rate risk; their value will normally decline as interest rates rise. Fixed income investments are also subject to credit risk, the risk that the issuer of a bond will fail to pay interest and principal in a timely manner, or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline.
The risks of investing in private credit collateralized loan obligations (CLOs) include both the economic risks of the underlying loans combined with the risks associated with the CLO structure governing the priority of payments. The most common risks associated with investing in CLOs are liquidity risk, interest rate risk, credit risk, prepayment risk, and the risk of default of the underlying asset, among others. These risks may be heightened for private credit CLO (also known as middle market CLOs), as the portfolios of underlying loans for such CLOs are typically smaller than those of broadly syndicated loan CLOs, and as such, private credit CLOs may not have the same access to the capital markets to potentially mitigate and/or diversify such risks.
Distributor: Foreside Fund Services, LLC
About Macquarie Asset Management
Macquarie Asset Management is a global asset manager, integrated across public and private markets. Trusted by institutions, governments, foundations and individuals to manage approximately
Macquarie Asset Management is part of Macquarie Group, a diversified financial group providing clients with asset management, finance, banking, advisory, and risk and capital solutions across debt, equity and commodities. Founded in 1969, Macquarie Group employs over 20,600 people in 34 markets and is listed on the Australian Securities Exchange.
All figures in this section as of September 30, 2024, unless otherwise stated. For further information, visit www.macquarie.com
Important Notices (Macquarie Asset Management): None of the entities noted in this media release is an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Commonwealth of
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1 Source: McKinsey, as of 2023.
2 Source: Next Street, JPMorgan, as of November 2023.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241202595040/en/
Media
Chris Sullivan/Chase Kosinski
Craft & Capital
chase@craftandcapital.com
Source: BondBloxx
FAQ
When will the BondBloxx Private Credit CLO ETF (PCMM) launch?
What percentage of assets does PCMM invest in private credit CLOs?
How large is the private credit market that PCMM targets?
Who is the sub-adviser for the PCMM ETF?
