Latest news with #SPDRSSGAApolloIGPublic&PrivateCreditETF
Yahoo
09-06-2025
- Business
- Yahoo
Interval Funds Having Big Year on Private Credit Demand
Interval funds, a niche rival to ETFs and mutual funds, are having a big year as investors increasingly utilize the vehicle to gain access to private markets. Asset managers including TCW have launched new interval funds, while Blackstone Inc., Wellington Management and Vanguard Group issued a joint fund this year. Asset managers have launched 25 so far this year, bringing the market total to 139, according to Morningstar Direct. They hold about $100 billion in assets, the largest being the $27.9 billion Cliffwater Corporate Lending Fund, Morningstar said. Interval funds are closer to mutual funds than ETFs due to their illiquidity. Still, their market is dwarfed by the $11 trillion in nearly 4,400 exchange-traded funds, as well as the $20 trillion in about 6,600 mutual funds. The funds' structure lends itself to investing in things like private credit and other assets not readily accessible in public markets. Unlike ETFs, which must be redeemable daily, interval funds can be redeemed at certain periods—intervals—typically quarterly. This quarterly redemption permits fund managers to participate in esoteric investments like asset-backed finance. Tom Balcom, founder of 1650 Wealth Mgt. in Lighthouse Point, Florida, said he's putting more client money into interval funds as demand for access to private credit markets rises. For example, a client wanting 20% exposure to fixed income may have 10% of his or her assets put into interval funds, he said. 'They offer better yields, and clients say, 'I'll give up the liquidity for the higher yield',' he said. The funds carry higher fees, with the tradeoff being less volatility and better yield, he added. For example, TCW in April launched the TCW Private Asset Income Fund, which allocates about 80% of the portfolio to private asset-backed credit in consumer finance, residential, hard assets and financial assets, the company said. The launches also come as ETF issuers struggle to crack the private asset market. The $54.7 million SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV), the first exchange-traded fund offering private market access, hasn't budged since its late February launch and has had no inflows since early March. The Securities and Exchange Commission has raised liquidity and naming issues with State Street Corp., which launched the ETF with Apollo Global Management. The agency has said the fund was misleadingly named and had liquidity risk | © Copyright 2025 All rights reserved Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-04-2025
- Business
- Yahoo
Vanguard, Blackstone, Wellington Partner on Private Assets
Fund giant Vanguard is teaming up with alternative asset manager Blackstone and Wellington Management to develop multi-asset investment solutions that integrate public and private markets to investors. The goal is to build 'fully diversified portfolios that incorporate private assets and pursue higher returns,' according to a Blackstone news release. The firm didn't share any information on what these solutions would be, but said that those details are expected to be announced in the coming months. News first broke that The Vanguard Group was reportedly holding talks with two of the world's biggest private equity companies about offering private assets to investors in March. Vanguard has a long history of disrupting the investing industry by providing access to investors and driving fees down—and doing so in the private marketplace is the next natural step for the company, Daniel Sotiroff, senior manager research analyst at Morningstar Research, told 'This is a big opportunity for them,' Sotiroff said. 'I think it's also kind of a test.' The firm's CEO Salim Ramji joined just last year, and the industry is watching to see if Vanguard still executes in the way we expect—low-cost, well-managed and transparent with the right vehicles, he added. Instead of relying solely on its own capabilities, Vanguard is partnering with Blackstone. It's a move that Sotiroff said isn't surprising given Blackstone's size. 'When you consider the scale that Vanguard operates at, you need somebody that's really big that can handle a lot of deals and handle a lot of private assets,' he added. 'It makes sense that they would partner with one of the bigger players in the space and they would go with somebody who has a pretty big reputation.' Throwing Wellington into the mix was a bit of a curveball, Sotiroff said. But considering Wellington has been Vanguard's go-to sub-advisor for equity products and the two companies have a long history, the move also makes sense. Vanguard isn't the first to explore private asset solutions. State Street and Apollo Global Management launched the SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) earlier this year, which aims to invest in private credit among other instruments, for example. But shoehorning an illiquid asset into a highly liquid ETF vehicle doesn't tend to work, so Sotiroff highly doubts the new offerings from Vanguard, Blackstone and Wellington will be in an ETF vehicle. He speculated it might be something like a tender offer fund, interval fund or a collective investment trust (CIT) for retirement. Wellington spokesperson Robyn Tice told the firm cannot comment on the details of any specific solutions that are not yet | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
29-03-2025
- Business
- Yahoo
Vanguard Said to Eye Blackstone, Carlyle Pact to Offer Private Assets
The Vanguard Group, known for its passive, low-cost mutual funds and ETFs, has reportedly held talks with two of the world's biggest private equity companies about offering private assets to investors. Vanguard, which manages $3.1 trillion in 88 U.S.-issued ETFs, in recent months has discussed private asset agreements with Blackstone Inc. (BX) and Carlyle Group Inc. (CG), Bloomberg reported, citing sources familiar with the talks. No deal to market private assets jointly with Carlyle or Blackstone has been finalized, Bloomberg reported, and none of the firms commented on the anonymously sourced story. Vanguard has long been known as the everyman's investing partner, with a large choice of passive, low-cost mutual and exchange-traded funds and thousands of followers called "Bogleheads" after the company's founder, Jack Bogle. While a tie-up with an elite, white-shoe financial firm may or may not challenge that reputation, the suggestion of such comes as a surprise to the firm's long-time watchers. 'It seems out of left field,' Senior ETF Analyst Sumit Roy said. Roy noted that while Vanguard doesn't permit trading of spot bitcoin ETFs because it feels they aren't appropriate for long-term portfolios, questions remain about whether private assets 'are appropriate for individual investors and, if they are, how those assets are offered to individuals.' The suitability of private assets in ETFs was raised earlier this year after State Street and Global Management launched the SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) which aims to invest in private credit among other instruments. A day after the fund launched, the Securities and Exchange Commission raised concerns over the fund's liquidity risk management program and the use of Apollo in its name. Vanguard, with $10.4 trillion in assets, currently offers private equity to clients through a pact with HarbourVest, Bloomberg said, adding that the partnership manages $2.4 billion as of the end of last year. 'It's like letting the low cost fox inside the high cost hen house,' Bloomberg ETF analyst Eric Balchunas tweeted, adding that 'ETFs could threaten revenue while exposing the mark to magic system.'Permalink | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
14-03-2025
- Business
- Yahoo
State Street Tries to Tap Long-Lost Mojo With Private Credit ETF
(Bloomberg) -- The first-ever ETF to bring private assets to the masses was meant to be a milestone this year in Yie-Hsin Hung's push to shake off State Street Corp.'s reputation for being cautious and boring. Trump DEI Purge Hits Affordable Housing Groups Electric Construction Equipment Promises a Quiet Revolution NYC Congestion Pricing Toll Gains Support Among City Residents Open Philanthropy Launches $120 Million Fund To Support YIMBY Reforms Prospect Medical's Pennsylvania Hospitals at Risk of Closure Hung has been tasked with reviving the appetite for innovation at State Street Global Advisors, which revolutionized investing by creating America's first exchange-traded fund three decades ago. Before her arrival in 2022 as SSGA's chief executive, the firm had spent years carefully trying to avoid a repeat of its blowups during the Great Financial Crisis. Under Hung, the $4.7 trillion asset-management division of State Street had created about 100 new funds in 2024, and now it was trying something truly novel. Instead, last month's launch of its private credit ETF in partnership with private equity giant Apollo Global Management Inc. sparked a rare public rebuke from US regulators, who cited SSGA for rushing the fund to market and questioned its liquidity, transparency and even its name. Hung is undaunted. At the end of last week, SSGA — the world's fourth-largest asset manager — rolled out another pioneering ETF, this time in a tie-up with Ray Dalio's Bridgewater Associates, the world's largest hedge fund. 'It's resolved,' Hung said in an interview about the SPDR SSGA Apollo IG Public & Private Credit ETF. 'This is innovation in action.' There is 'tremendous' interest in the private credit fund from clients who want to learn more and trading volumes are high, she said. Early Results Still, the ETF has had only about $5 million of net inflows since its debut at the end of February. And despite the faster pace of launches last year, SSGA's tally of new ETFs didn't rank among the industry's top 10 by firm. To Hung, who held leadership roles at New York Life Insurance and Morgan Stanley, such hiccups are nothing serious when you're trying to build momentum. Her tenure so far has been marked by hires and departures, restructurings and a public acknowledgment that SSGA has to start moving faster and more creatively. She's pushing to grow in the wealth space and regions including Europe and Saudi Arabia, and has said SSGA is shopping for a stake in a private credit firm. The Boston-based firm lost much of its mojo for almost two decades because of scars left from the crisis era. The collapse of a State Street mortgage bond fund led to federal sanctions in 2010 and about $650 million in restitution. The result was a risk-averse culture that ceded leadership to its rivals in the booming ETF field. For the next several years, hiring leaned more toward filling positions in the legal, risk management and compliance departments, according to former operations executives. Resources became scarce and sometimes were frozen in the middle of campaigns, making it hard to support new funds or projects and scale them quickly, they said. Approval Agony The approval process became its own form of agony. Even simple proposals had to clear multiple committees, and often by the time a new initiative won approval, rivals already had their own versions, the former employees said. Spending in many areas was tighter than peers such as BlackRock Inc., said former executives. As the steady-yet-unexciting DNA of the parent company spilled into the asset manager's ranks, innovation gave way to process, and 'boring' became a sought-after compliment. The firm did grow as ETFs became more popular, but more slowly than key rivals. In the time it took for SSGA to go from $2.4 trillion to $4.7 trillion in assets during the 10 years ending in 2024, BlackRock and Vanguard added more than $6 trillion each, and Fidelity Investments went from about $2 trillion to $5.9 trillion. Even SSGA's iconic S&P index fund, known by its SPY ticker, fell behind the competition. Just last month, Vanguard's $586 billion S&P 500 ETF – launched about 15 years ago — overtook SSGA's 1993 offering, and the two have been trading the lead back and forth. Speed Push Against this backdrop, the firm devised its new private credit fund with Apollo as the manager. It was a process that sometimes highlighted internal tensions between staffers who favored more speed and those who urged caution. Hung's push to get the fund to market made some team members hopeful that something was changing with SSGA's slow-moving culture, according to people familiar with the fund's creation. But while it took longer than a typical ETF launch, some colleagues still held concerns the firm was moving too fast and risking objections from the US Securities and Exchange Commission, some people said. Indeed, the SEC took public issue with the fund on its launch day, showing it didn't consider all its concerns resolved. In a three-page letter, the SEC criticized the fund's sole reliance on bids from Apollo, which could cast doubt on the true value of the assets, and expressed concern about their liquidity. The name was misleading and should be changed, the SEC said, given Apollo's limited role in actually running or sponsoring the fund — it's not an adviser or sponsor. As for the fund's contract with Apollo, the copy sent to the SEC for review by SSGA was so heavily redacted that 'the material terms of the agreement are not public,' the SEC said. Making Tweaks SSGA, which had wanted to protect proprietary information, responded by sending an unredacted copy and agreeing to tweak the name. The SEC staff told the fund's lawyers they had no further comments 'at this time' and trading has moved ahead, with the ETF holding about $55 million in assets. Representatives for the SEC and Apollo declined to comment. SSGA said in an emailed statement there was no internal discord at the firm, which encourages 'robust discussion and conversations,' and the SEC's actions were not out of the ordinary. State Street Chief Executive Officer Ronald O'Hanley said via email he supports Hung and SSGA's 'democratization of investing and working with partners like Apollo to deliver access to private assets.' SSGA launched about 20 new ETFs in the US last year, though most remain small by industry standards. The biggest, dubbed SPDR Bloomberg Enhanced Roll Yield Commodity Strategy, manages around $400 million, but almost none of the new entrants exceeds $100 million, according to Morningstar Inc. and data compiled by Bloomberg. Some manage less than $10 million. The SPDR Bridgewater All Weather ETF, trading for less than two weeks, holds about $53 million. 'We're talking about early days,' Hung said. 'It takes time to build that AUM flow and we can't forget this market is extremely volatile.' --With assistance from Laura Benitez and Nicola M White. (Updates with Bridgewater ETF assets on the last screen) How America Got Hooked on H Mart How Trump's 'No Tax on Tips' Could Backfire for the Working Class How Natural Gas Became America's Most Important Export Disney's Parks Chief Sees Fortnite as Key to Its Future Germany Is Suffering an Identity Crisis 80 Years in the Making ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
09-03-2025
- Business
- Yahoo
State Street's PRIV Misses Mark on Private Credit Promise
The recently launched SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) garnered widespread attention for its groundbreaking approach to private credit investing, but analysis reveals a gap between its marketing and reality. According to a research report from CFRA, the fund received Securities and Exchange Commission approval to exceed the standard 15% limit on illiquid securities stipulated in the Investment Company Act of 1940. Investors anticipated PRIV would hold between 10% and 35% of its portfolio in private credit instruments. Despite regulatory permission to increase private credit exposure beyond traditional limits, PRIV currently holds just 5% of its portfolio in private credit assets, according to CFRA, with the vast majority in highly liquid public securities that offer little differentiation from conventional fixed-income ETFs. The fund's current portfolio differs from the private credit focus many expected. CFRA's analysis shows 42% of PRIV's exposure is in public corporate debt, with another 19% in securitized agency mortgages and 15% in Treasuries or cash instruments. "While this ensures that its portfolio is liquid, it also makes it less differentiated relative to other fixed-income funds, since its constituents are widely held by mutual funds and other ETFs," wrote Aniket Ullal, head of ETF research at CFRA, and Sourav Srimal, senior vice president of solutions at SOLVE, in their joint report. The liquidity profile further underscores how conventional PRIV's current holdings are. Over 75% of the portfolio is classified as liquid, with 62% rated as highly liquid, based on Trade Reporting and Compliance Engine data aggregated by SOLVE. This liquidity composition contrasts with other private credit options like the BondBloxx Private Credit CLO ETF (PCMM) and VanEck BDC Income ETF (BIZD), which have fewer holders of their underlying securities, the report shows. On average, PRIV's constituents are held by 110 other mutual funds, exchange-traded funds or insurance firms, while PCMM's holdings average just four other holders, the report stated. Only 11% of PRIV's constituents were held by fewer than 10 other investment vehicles. The fund's yield reflects its conventional portfolio composition. PRIV's published yield to maturity, as of March 3, was 5.44%, lower than BIZD's 9.02% and PCMM's 7.44% 30-day SEC yields. PRIV's arrangement with Apollo Global Securities, which contractually agreed to provide intraday executable bids on private credit investments, appears largely unused given the fund's current highly liquid portfolio composition, according to the CFRA report. The report suggests that the ETF's composition could evolve: "Going forward, it seems likely that this actively managed ETF will start to take on more private credit that is sourced from Apollo." The agreement requires Apollo to publish three executable quotation sheets daily to buy PRIV-held securities sourced from Apollo, with quotes "no worse than those offered to similarly situated clients," according to the CFRA | © Copyright 2025 All rights reserved
