FUNDRAISING NEWS | December 03, 2024
Fixed income ETF platform BondBloxx is tapping into the private credit market as it announced the December 3 launch of its first private credit ETF.
As previously reported by Dakota, BondBloxx filed its application for the fund on September 13, just days after State Street Global Advisors and Apollo Global Management announced their own plans for a private credit ETF.
“It’s not surprising that they’re sitting out there in labs everywhere trying to figure out how to ETF-ize private credit and private equity,” Bloomberg Intelligence ETF analyst Eric Balchunas said in an interview at the time. “Investors out there definitely want access, so whoever can bridge that gap is going to make out, so there is incentive to do it. We saw what happened with Bitcoin. They figured that out and, boom, you saw the success there, so same deal here.”
The Larkspur, CA-based firm’s new fund, BondBloxx Private Credit CLO ETF (PCMM), will provide investors with direct exposure to private credit middle-market companies, specifically via CLOs in which at least 80% of the fund’s assets will be invested. BondBloxx said the PCMM will provide investors strategic allocation with higher yields and ETF liquidity in their private credit portfolios, while complementing existing fixed income policies. Macquarie Asset Management acts as the fund’s sub-advisor.
“The portfolio diversification offered by private credit exposure is a key aspect of this new fund,” Co-Founder Tony Kelly said in a statement, “but just as important is the diversified nature of the fund’s holdings themselves.” The firm cited McKinsey data observing that the private credit market in 2023 has grown to over $30T in the US alone.
