I don’t mean to pile on here given the headlines of liquidity challenges facing retail private credit vehicles, but could Cliffwater have built its lucrative interval fund business without a stable of institutional investors?
As I understand it, private credit managers give consultants like Cliffwater small, no-fee bites of private credit deals. The consultant then repackages and combines these bites into a diversified retail product which is sold to retail investors who pay a fee.
So why would a private credit manager give away free private credit “bites”? Maybe because the managers feel they must do so for Cliffwater to consider their fund for a much larger investments from institutional investors that Cliffwater advises.
(Not expecting many “likes” on this post given that for understandable business reasons, many managers cannot risk upsetting Cliffwater.)