Adviser recommends senior, secured private credit for trust as legacy private investments wind down

Patrick Wing delivered a detailed briefing on private credit, describing the asset class as "privately negotiated loans and other credit originated predominantly by nonbank financial institutions to privately held businesses." He told the committee the private‑credit market has grown markedly since 2005 and that, over a 25‑year view, private credit has delivered near‑equity returns with shallower drawdowns and consistent interest income.

Wing described typical private‑credit features — five‑to‑seven‑year maturities, floating rates tied to SOFR plus spreads, and a preference for senior, secured loans — and said his recommendation for the trust would focus on the lower‑middle‑market direct‑lending segment where terms are more favorable to lenders. "This is the most conservative segment where you're senior in the capital structure...the loans are secured," he said.

He contrasted closed‑end, drawdown structures with evergreen or commingled vehicles that offer quicker exposure and configurable dividend/redemption options, and warned of the asset class's illiquidity and lower transparency compared with public securities. Wing emphasized that recent press coverage about liquidity pressures affected retail BDCs and certain vehicles—not the institutional evergreen structures the adviser proposed. "That was private credit, but it was a different investment vehicle," Wing said, explaining the run‑type headlines were tied to mismatches between promised liquidity and underlying loan illiquidity in retail vehicles.