As the private credit market begins to open up to retail investors, technology may offer a way to structure products and meet the requirements needed for the space.
At a webinar on 11 December, hosted by Alternative Credit Investor in partnership with technology provider Allvue Systems, investment professionals from the sector came together to discuss using technology to scale private credit in 2026.
During the discussion, the evolving trend of retail investors allocating to private credit was explored, alongside how technology can aid this transition.
Matt Clark, a panellist at the webinar and managing director, alternative investments advisory services at KPMG, stated that as more managers look to expand their capabilities in providing products to retail investors, there will be an increase in private-public partnerships.
He explained that there are two avenues to opening up private credit to retail investors: through partnerships or providers, such as iCapital.
Read more: Speed is the new alpha: How AI and data are rewriting credit market strategy
Private market managers have the capabilities to invest in private markets and private credit, but don’t have retail capabilities, whereas public firms have those capabilities. Therefore, there will be an increase in these partnerships, which is already happening, he explained. Where technology can assist in these partnerships is in exchanging data, Clark added.
“You are seeing a lot of partnerships out there where private market firms are partnering with public market firms to be able to offer the investment capabilities but are leaving the distribution to the public firm… There is data exchange that needs to that needs to take place between those two firms that I think is a real challenge that technology can solve.”
Humphrey Wood, head of product, credit at Allvue Systems, also a panellist, said technology can help with valuations, particularly as data transparency is a challenge when offering these products to retail investors.
“The volume, the velocity and transparency of the data and reporting that is provided to those investors. There are other non-technology challenges as well like making sure there is good wealth management capability at a general partners firm and also that there is appropriate structures to be able to limit the risk of illiquid assets in liquid vehicles,” Wood explained.
He added that technology can assist with jurisdictional requirements, variations in investor volumes and understand investment and different access channels. “The foundational data layer of that is very important, the mastering piece and how you distribute that data to investors efficiently,” Wood said.
“What may happen over time, and is already happening, is the dePDFication of the private markets, moving from static generated reports to electronically communicated data and great client experiences for the wealth channel or smaller investor channel,” he added.
Read more: Allvue Systems launches AI-ready platform for private capital data
Giving an investor perspective, Ryan Sample, vice president strategy and chief operating officer operations from Manulife, said the company sees opportunities with artificial intelligence, but emphasised the importance of experience and understanding when selecting technology.
“We look for experience in the space…the first progression is: is this something we should build vs buy? Private credit and research need they are pretty complex, as we have been doing this for a time,” Sample said. “Experience and understanding of credit markets and then building a user interfaces that investors are comfortable with is really important to get something quickly to use, without being a strain on the investment team.”
He added that the firm also considers the provider’s long-term commitment, including research and development investment and platform evolution, to ensure the offering can adapt as technology develops.
