PGIM, the investment management arm of Prudential Financial, announced the launch of its first private credit collective investment trust for defined contribution plans. The CIT provides exposure to a diversified range of investment-grade private placement and asset-backed finance securities. PGIM expects it to be the first of several private markets products it plans to launch for DC plan use.
The PGIM Investment Grade Private Credit Fund of the Prudential Trust Company Alternative Investments Collective Trust can be used within target date funds, stable value funds and other white-label or multi-management investment vehicles. PGIM’s multi-sector credit team serves as a subadvisor to the trust.
“DC plan sponsors are increasingly looking for ways to diversify beyond traditional fixed income, but the structures available to them haven’t always kept pace with the opportunity set,” said John Vibert, head of credit at PGIM, in a statement. “With a long lineage in private credit and a trillion-dollar credit platform, PGIM is well positioned to deliver solutions that are leading-edge and purpose-built for the operational and liquidity requirements of the retirement channel.”
As the Trump administration has pushed to allow the use of private-market assets in DC plans, a growing number of asset managers have launched CIT plans focused on private-market investments. For example, last year, Goldman Sachs Asset Management launched its Goldman Sachs Collective Trust—Private Credit Fund, offering access to a mix of direct lending and private credit placements managed by GSAM funds. Likewise, this February, asset manager Invesco announced the launch of its Invesco Core Plus Real Estate Fund CIT.
PGIM has a long track record in the private credit sector and manages $264 billion in private credit assets. However, the timing of its CIT launch coincides with a period of heightened turbulence in private credit markets. After individual investors were spooked by high-profile bankruptcies and negative headlines about private credit semi-liquid funds, these funds have been facing a higher-than-normal level of redemption requests. As of early April, private placement BDCs paid $1.2 billion in quarterly redemptions, while publicly traded BDCs paid $7.4 billion, setting a record. While current research shows these funds’ portfolios appear well protected from potential defaults, alternative asset managers have spent recent months trying to reassure investors that private credit remains an attractive investment option.