Typical responses for yield-seeking investors have been to take a more aggressive stance on risk by moving into corporates and high yield, or extending into longer term maturities to take advantage of a very gently sloped yield curve. A third alternative is to add leverage. All of these solutions involve incremental risk – credit risk, interest rate risk, or leverage risk.
Private Credit, in the form of KiWi Private Credit Fund managed by Kilgour Williams Capital, is an alternative that performs as well as High Yield bonds yet has the volatility of Short Term Treasuries. The fund consists of a widely diversified portfolio of high quality business and consumer loans and over the last 3 years it has delivered superior monthly income with very low volatility when compared to traditional fixed income alternatives.
Even during the depths of the COVID shock in the spring of 2020 when equity and bond markets were being whipsawed, KiWi Private Credit Fund remained profitable in each and every month and has now amassed a streak of 42 consecutive months of positive returns. And the fund has accomplished this without taking on more risk, stretching out term, or adding leverage. The fund’s very basic approach is to invest in good loans, seek maximum portfolio diversification, and to stay on strategy. Additionally, with a portfolio duration less than one year there is very little interest rate risk.
If you are looking for income in your portfolio but don’t want to take additional risk to achieve it, please contact us. We would love to speak with you about a better alternative.