Institutional interest in private credit (PC) is surging. According to Marsh’s 2026 Global Insurance Investments Survey, 57% of insurers plan to increase their private credit allocations over the next 12 to 24 months, which constitutes a massive leap from just 32% the previous year. In particular, this demand is robust among large North American institutions that seek meaningful yield pickup compared to public market alternatives.
Key Takeaways:
- Insurer demand for private credit is surging, with 57% of institutions planning to increase allocations despite widespread concerns over tighter spreads, rising defaults, and internal expertise gaps.
- PCR offers liquid access to private credit through BDCs and closed-end funds, effectively outsourcing complex asset selection.
- To address credit downside, PCR incorporates a built-in long/short equity swap hedge designed to protect capital against default cycles and spread compression.
See More: Beyond Corporate Bonds: Enhance Income With Private Credit
Turning Private Credit Fears Into Opportunity
The rush into private credit doesn’t come without its detractors. According to the Marsh Survey, two-thirds of insurers worry about tighter spreads and reduced illiquidity premiums. Additionally, 51% fear rising defaults, while only 30% feel they possess the internal expertise to invest confidently.
This capability and risk-management gap is exactly where the Simplify VettaFi Private Credit Strategy ETF (PCR) comes into play. For both institutional and retail investors seeking private credit exposure without taking on unhedged downside risk, PCR offers a highly sophisticated, liquid alternative.
PCR builds a core foundation in the asset class by investing in business development companies (BDCs) and publicly traded closed-end funds (CEFs). This structure immediately solves the expertise gap cited by 70% of insurers by outsourcing asset selection to seasoned portfolio managers who specialize in navigating private credit.
Strategic, Built-In Hedging Within ETF
More importantly, PCR directly addresses institutional anxieties regarding default risk and tighter spreads. Unlike standard long-only private credit allocations, the ETF utilizes a proprietary long/short credit hedge driven by total return swaps on quality and junk equities. Because junk equities frequently act as a leading indicator for systemic credit deterioration, this built-in defensive overlay helps to insulate investors against the exact rising default cycles and widening spreads that insurers now fear.
Ultimately, by wrapping an institutional-grade private credit strategy and an active risk hedge into a transparent, liquid ETF, PCR effectively democratizes a highly sought-after asset class. The fund also answers the market’s growing call for defensive capital preservation in today’s uncertain fixed income environment.
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VettaFi LLC (“VettaFi”) is the index provider for PCR, for which it receives an index licensing fee. However, PCR is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of PCR.
