Once described as “alternative lending”, private credit today is becoming more mainstream as an asset class with access increasingly offered to private investors. The expansion has been largely a US phenomenon, but with disappointing growth equity markets, investors with a higher risk appetite are increasingly seeking access to this sector. This article explores what is meant by private credit as well as the different options available to private investors in the UK.
Private credit describes loans made outside the banking system, but which are not structured as bonds and are not publicly traded. It is a broad definition that encompasses direct lending, mezzanine, asset-backed lending as well as leveraged buyout, real estate debt and infrastructure debt.
The sector developed after the global financial crisis (GFC, 2008), when new banking regulations such as Basel III made many kinds of riskier and leveraged lending less attractive or more expensive for banks. This left a funding gap, especially for middle-market firms or leveraged buyouts, or where bespoke financing was needed.
Since then, the asset class has grown dramatically, particularly in the US where, by the end of 2023 according to McKinsey, it was nearly ten times larger than it was in 2009. Total assets are now near US$2 trillion.
Although the size of the asset class in the UK has been much smaller, the recent growth has been equally strong, particularly in areas like real estate-backed lending and mid-market corporate credit. Asset managers and pension funds have been increasing their allocations as they seek low correlation from the traditional markets, more predictable cash flows and yields.
Returns so far have been good – over the past two decades to December 2024, private credit in the US has delivered higher annualised returns relative to global high-yield bonds.
Historically, private credit has been accessible only to large institutional investors (pension funds, endowments, sovereign wealth funds) who can manage the closed-ended features (often 10+ years), high minimum investments (e.g. $5-10 million) and regulatory and legal barriers. Options for private investors have been limited to P2P (peer-to-peer) lending platforms. These have been successful in disintermediating banks, however they have often fallen short with regard to credit risk management and regulatory oversight, which has led to mis-selling, inadequate disclosure and even fraud. Several high-profile failures have tarnished the sector’s reputation. It has been difficult for surviving platforms to retain credibility, secure institutional funding, or attract a broad retail investor base.
However, things are changing, for example with the recent emergence of “semi-liquid” or “evergreen” funds, which are open-ended with more frequent redemption windows (often quarterly) and lower minimum investments (in some cases ~£10,000).
In both the UK and EU, there is a regulatory interest in broadening access to private markets. The new LTAF (Long Term Asset Fund) UK regulatory structure, which would potentially enable smaller investors to access private credit, is intended to be opened to ISA investors from April 2026. However, to date the limited number of funds launched in the UK have been focussed on private equity and on infrastructure investment, or they have been designed to be marketed to pension funds. Aviva’s Multi-Sector Private Debt LTAF for example, launched in January 2025, was seeded with £750m from their own managed pool of pension fund money, and is being offered to other pension funds but is not available to private investors. It is also unclear whether the main investment platforms will find it easy to offer funds without daily liquidity.
LGB’s Medium Term Note (MTN) programmes provide investors with access to fixed income opportunities that are often direct and bespoke in nature. Much like private credit funds, MTNs bypass traditional bank channels, enabling corporates to raise capital through tailor-made debt issuance.
Their common issue terms and collateral arrangements enable MTNs to be a good starting point for investors seeking to establish a private credit portfolio. Investors can tap into regular deal flow and add to their holdings progressively as they become familiar with the issuance process and the issuers in question.
LGB Capital Markets conducts extensive due diligence and monitors the financial health of issuers, who set up programmes for capital requirements over the long term. This deep and ongoing relationship with corporate issuers allows a thorough, continuous understanding of how these businesses perform and evolve, as well as an opportunity to spot any red flags early on. Importantly, experienced investors are invited to meet with issuers on a regular basis, providing further due diligence as well as an exhaustive understanding from these investors of the investment proposition.
Investors are encouraged to build laddered portfolios of issues, using the regular proprietary deal flow to diversify risk by issuer but also by maturity. This allows investors to build robust portfolios that generate regular income and have redemptions at different times, giving the investors important cash flow to meet any liability requirements without depending on secondary markets. This strategy has proven to create attractive returns over time through compounding interest, a concept which Einstein described as the eighth wonder of the world.
The absence of a public market in private credit instruments presents a liquidity risk. Investors have to create liquidity through the structure of their portfolios and the cash flow profile of their investments. This is why the laddered portfolio concept is important.
The second obvious risk given the private nature of the investments is a lack of information. This could result in investors misjudging the robustness of a borrower or a transaction structure and taking equity risk in the form of debt. Investors should allocate time to reading transaction material and participating in calls with borrowers if arranged. Investors unable to do this should focus on managed funds.
It may be easier than in the case of public bonds to “extend and pretend” when a borrower has run into trouble, and the lack of a mark-to-market may disguise underlying problems. Indeed, we are currently seeing in the First Brands bankruptcy in the USA a case of a company in part funded privately, coming rapidly unstuck. It seems – and the Financial Times has covered this extensively – that the mix of public and private loans the company had taken on through a highly complex capital structure were not all done with full disclosure to different counterparties.
Equally LGB has also not been immune to events of default where the role of security trustee became critical for investor protection. Lessons include the need for proper covenants, full due diligence, performance monitoring, robust legal documentation and proper security structures. Investors on their end should ensure that they have fully read and understood the information on any particular investment proposition and are comfortable that the risk of the investment is within their appetite and tolerance.
With banks becoming wholesale providers of credit and a wide range of intermediaries now managing relationships with borrowers, we can expect that the private investors will be given a broadening range of ways to access the private credit market. Attractive returns are available to investors willing to manage the key risks of liquidity and a relative lack of information about borrowers and comparable transactions.
LGB’s MTN programmes represent an appropriate starting point for investors new to the asset class. They are designed specifically for UK private investors, family offices and wealth managers with suitable denominations and minimum investment requirements.
With regulators in the UK looking to broaden access to private market assets, MTNs already sit within a regulated capital markets framework, providing greater transparency and investor protection than some fund structures.
Transaction Manager
Alexia Rottet joined LGB in October 2025 as a Transaction Manager. Prior to LGB, she gained real estate experience by participating in the valuation of a property portfolio for A2immo.ch SA as a financial analyst, as well as working at Form Structural Design as an office manager. Alexia holds an MA in Entrepreneurship and Innovation and a BA in International Relations.
Assistant Relationship Manager
Ruby joined LGB in December 2024 as an Assistant Relationship Manager for our investing clients. Prior to LGB, Ruby worked at FHIRST, a start-up where she collaborated with the co-founders on revenue growth and improving client experiences. Ruby graduated with a First-Class degree in History from Durham University.
Finance Manager
Following a degree reading Chemistry at The Queen’s College, Oxford, Antonia trained to become a chartered accountant at a London-based audit firm. She then moved into the tax sector joining EY and completing the chartered tax adviser qualification. She then gained further experience working as a finance director within industry at a family office / hedge fund.
Programme size: £20m
Establishment Date: December 2017
Number of issues: 12
Sector: Marine tracking
Focus: Maritime surveillance and management
Programme size: £25m
Establishment Date: XX 2017
Number of issues: 20
Sector: Financial services
Focus: Loans and leasing
Associate Director
Omar joined LGB in February 2026 as an Associate Director in the Capital Markets team. He brings over five years of experience from NatWest, where he worked across the Leveraged Finance Origination and Portfolio Management teams. During this time, he supported a broad range of businesses from venture-backed to large-cap companies, with a primary focus on the mid-market. His experience was sector agnostic, and the majority of the companies he worked with were sponsor-backed, giving him extensive exposure to private equity-led transactions and capital structures. Omar holds a degree in Accounting and Finance from The London School of Economics & Political Science and is a Chartered Banker.
Adviser
Charles has played an important role in developing LGB & Co.’s investment approach by encouraging a focus on investing in businesses with strong IP or know-how with recurring revenue business models that can prosper throughout economic cycles. Charles brings over 30 years’ experience of investing in privately-owned and publicly-listed small and mid-market companies. He is a director of Larpent Newton & Co. and Hygea VCT plc. Charles qualified as a Chartered Accountant at Peat Marwick, now part of KPMG.
Adviser
Lisa has worked with LGB since 2015 in supporting the on-going cultural and organisational development of the firm, providing advice on strategic people matters. Since 2006, Lisa has been running her own consultancy and executive coaching business, People Possibilities Ltd. Her work is focused on supporting clients at an organisational, team and individual level to enable high performance,improve leadership capability and effect cultural and behavioural change. Previously Lisa has held senior HR leadership positions with Schroders, ABN AMRO and HSBC. Lisa graduated from the University of Birmingham with an honours degree in International Relations & French. She is a Fellow of the Chartered Institute of Personnel and Development (CIPD) and a qualified Executive Coach.
Chairman
Simon became non-executive Chairman of the Board of LGB & Co. with a focus on growth and strategic initiatives in December 2025. Simon has extensive experience in capital markets and wealth management. He previously ran the client and investment business of Heartwood and became Chief Executive in 2008. He led its well-regarded acquisition by Handelsbanken in 2013. Simon subsequently became NED and Chair of AIM-listed WH Ireland Group PLC. He was also asked to represent the wealth management sector on the FCA Smaller Business Practitioner Panel from 2013-2016.
Capital Markets Director
Fergus advises corporate clients looking to raise debt and equity capital. He is also responsible for the execution and ongoing management of LGB’s MTN Programmes. Fergus joined LGB in 2019 having started his career at Lloyds Banking Group on the graduate training programme, before moving to the Leveraged Finance division, where he focused on transactions with mid-market corporates and PE firms. Fergus holds an MSc in Petroleum Geology from the University of Aberdeen.
Associate Director
Megan joined LGB in 2021 as a Relationship Manager. She is responsible for all day-to-day transactions with investment clients and oversees the LGB Investments Platform and Deal Hub. Prior to LGB, Megan worked at Puma Investments, a tax-efficient investment provider, in the sales and investor services team. Megan graduated from the University of Bath with a Bachelor of Science degree in Psychology, and has obtained the CISI Level 4 Diploma in Investment Advice.
Investment Director
Ivan is LGB’s Investment Director: he is responsible for developing LGB’s investment proposition in the context of the broader market and economic developments. He regularly meets individual company management teams to seek out and monitor investment opportunities. Ivan has served as a senior adviser to the Equity Division of Société Générale, and was previously Managing Director in charge of equity sales for them in London. Earlier in his career, Ivan worked at Morgan Stanley, Lazards and Schroders. He has degrees in history from Cambridge University & London University, and an MBA from Cass Business School.
Managing Director
Simone joined LGB in 2012 and is responsible for LGB & Co.’s business with institutional investors, wealth managers and sophisticated private investors. Simone’s team provides access to a range of compelling investment opportunities with a particular emphasis on structuring laddered portfolios of fixed income. In addition, the team manages portfolios of clients who have entered into advisory agreements with LGB Investments, and advises the fund managers of the Guernsey-based LGB SME Private Debt Fund. Prior to joining LGB & Co., Simone worked in the institutional fixed income department of Citigroup Global Markets. She began her career at Citigroup Private Bank in Geneva. Simone graduated from the University of Lausanne with a degree in HEC, Business Administration. She is a Chartered Member of the Chartered Institute for Securities & Investments and a Director of LGB.
CEO
Cedric was appointed CEO in July 2022 after a period of 18 months as a COO. Cedric spent 15 years working on the energy and commodities sales and trading desks for global banks (BNP Paribas, BAML and MUFG). He gained extensive international exposure, being based in London and Singapore and covering transactions in all geographic regions. Cedric graduated from Global Executive MBA at INSEAD in 2018 and started working in the capital markets space for growth-stage companies. He is also a director of LGB.
Managing Director, Capital Markets
Andrew founded LGB & Co. in 2005 and is managing the Capital Markets team. He has a particular focus on the development of strategic relationships with corporate clients and business partners. Prior to founding LGB & Co., Andrew was a Managing Director at Citigroup Global Markets, where he was responsible for its fixed-income business with private banks and retail institutions. Earlier in his career Andrew worked at Schroders in London and Tokyo. Andrew graduated from Oxford University with a degree in Modern History. He is a chartered member of the Chartered Institute for Securities & Investment.