MarketsMar 5, 2025
State Street and Apollo Launch New First-Ever Private Credit ETF, Opening Up Private Market To Retail Investors
Alternative Yield
Noah Weidner
Discover
If you need some cash, you might spend on credit or get a loan from a bank, but what happens if you need a lot of money? That’s a problem afflicting growth-oriented businesses, which can’t always go to a bank and ask for a small loan of a billion dollars. However, it’s no matter because, in recent years, companies have been able to ask non-bank lenders — usually investment funds and private equity with more lax underwriting and higher risk appetites — for a loan instead.
It’s called private credit — and it’s the hottest new thing on Wall Street, with its total market growing to over $2T according to an analysis by the International Monetary Fund. And ironically, it’s not necessarily private anymore, thanks to a new ETF. But is this misnomer worth putting your money in?
Private credit goes public: This week, ETF heavyweight State Street ($STT) launched the first-ever private credit exchange-traded fund, the SPDR SSGA Apollo IG Public & Private Credit ETF ($PRIV). The fund gives retail investors access to a portfolio of assets issued and owned by alternative asset powerhouse Apollo, one of the foremost leaders in the private credit space. The launch of the fund has been heralded as a massive stepping stone to the wider acceptance of private assets on public markets. However, as the name suggests, it won’t just be private assets that investors are buying.
The latter part is important because it means that the majority of’s assets are still publicly traded; things like treasury bonds, money market funds, and other assets. And at a 0.70% expense ratio, that’s a lot of money to be paying — so what do you get?
Should you buy it? The buzzy new listing hauled for over $55.5M in inflows on its first day, but that doesn’t mean you should buy it. Before its launch, State Street had a months-long correspondence with the SEC, which raised red flags about liquidity and fund safety. The back-and-forth ended with Apollo committing to bid on the fund’s sourced assets, classifying them as liquid. That was Apollo’s mission: to build the first marketplace for private credit. No doubt, is a substantial stride for private asset availability, but with its questionable distribution rate, steep management fee, and great unknowns, investors are likely better off sticking to the boring, cheap, and well-known alternatives.
