PRIV and Beyond: March 23rd Edition
Outflows, the reality of redemptions, a lot of narrative.
Welcome to the March 23rd update for PRIV and Beyond!
The usual data/tracking up front for PRIV/PRSD and then we’ll dive into the current narratives around private credit as a whole and some really strong words from the DoubleLine’s Jeffrey Sherman at Exchange last week.
Volumes, Flows, Assets
PRIV
No flows last week. 40,000 shares traded.
PRSD
The flows I mentioned in last week’s update showed up and it was not a positive one for PRSD. 1,103,700 shares traded, 950,000 shares redeemed. Leaves the fund with roughly $47mm AUM, down a whopping 62% in March.
Gotta believe someone at State Street is taking a hard look at this. The macros aren’t bad for a short duration product or at least they haven’t meanfully changed enough to warrant 60% outflows.
Major position changes for the Apollo assets including Hermes, Fides, Grange and Oryx.
Macro
There was quite a buzzy panel at Exchange last week with Jeffrey Sherman, deputy CIO from DoubleLine, coming out hard against private credit in the ETF wrapper.
I agree with his overall sentiment. As we’ve discussed many times, things like PRIV can work in the ETF wrapper but they have to sacrifice many of the “benefits” associated with private credit to do so. There is a fundamental mismatch of expectations and that may never get fully resolved. As I’ve said, I do not see the demand.
Aside from the flow into PRIV last month, I see minimal demand for funds with private credit assets. We can see the flows coming out of both BIZD and PRSD while the rest sit flat. Pardon my not reporting more on PRAB but I think a total of 1,000 shares have traded since launch (including my share!). I don’t see some juggarnaut of flows coming down the pipeline. If anything the monstrous amount of negative coverage surrounding the AI sector of the middle market lending is likely pushing investors away!
To that point, Brian Moriarity has a very sober article out about the realities of semi-liquid vehicles. If you haven’t been keeping up with Morningstar’s coverage in the space, do yourself a favor and start. They’re even-keeled and fair but they don’t hesitate to let folks know that this is what you signed up for!
Ok, that’s all for this week.
Next week will bring some changes to the cadence of the schedule for this little newsletter.
I will have an edition over the weekend covering Monday through Thursday of this week and then going forward all publishing will be on either Saturday or Sunday.
Starting next Monday I’ll be joining a new company! (More on this in the future)
That will consume my weekday hours moving forward.
I’ll be updating my disclosures to reflect that this newsletter is just my opinion and that I’m not being paid for it!
Don’t be overly surprised if I shift to an “every two weeks” model for a few months as I get settled in. Thank you to all of my readers, I appreciate your sticking with me!
Unless otherwise noted all data comes from my app and the database it pulls from uses the public holdings files from State Street and Invesco (linked below) to generate insights and track product changes..
Volume data is public.
Available FINRA data for assets:
More of my latest work:
Your Private Credit ETF Crash Course - ETF.com
Private Credit ETFs 101: Business Development Companies - ETF.com
Private Credit ETFs 101: Collateralized Loan Obligation - ETF.com
Have a great week!
Leave a comment/note/send me a message about my app/data and let me know what I can do better or just get rid of! No wrong answers.
Go read these people:
Dave Nadig : Nadig.com / ETF.com
Tony Dong : Linkedin / ETFCentral.com
Nicholas Phillips : Linkedin / ETFCentral.com
Jeff Ptak : Substack | Morningstar
Tematica Signals : Substack
Phil Bak : Substack
CovenantLite : Substack
Brent Sullivan : Substack
Leyla Kunimoto : Substack
The Kotok Report : Substack
Bob Pisani: Substack
also anyone I subscribe to on Substack. I actually do read them!
Thanks for reading.
If you want to chat, please reach out to cmacwilliams@outerbeachc.com or connect with me on LinkedIn.
Disclosure: I own one share of PRIV, two shares of PRSD, two shares of PRAB, one share of XOVR, and one share of RONB. None of this is investment advice and is presented solely for educational purposes.
All opinions presented are solely my own and do not reflect the opinion of any organization I’m associated with.