BondBloxx launches private credit ETF

BondBloxx has launched a fixed income exchange-traded fund (ETF) offering investors direct exposure to private credit.

The BondBloxx Private Credit CLO ETF (PCMM) provides direct exposure to private credit middle market companies, of which there are approximately 300,000 in the US, generating $13tn (£10.3tn) in annual revenue.

PCMM invests at least 80 per cent of its assets in private credit collateralised loan obligations (CLOs). A specific benefit of this ETF will be the ability to own private credit CLOs from any of the major underwriters. 

Read more: CLO ETF market grows to $19bn

“The ETF industry has been a force of continuous innovation for investors, and I am proud that BondBloxx is a leader in that innovation in fixed income,” said Leland Clemons, founder and chief executive of BondBloxx. “We’re thrilled to bring private credit to ETFs, and we look forward to redefining what is possible in fixed income ETFs.”

BondBloxx co-founder Tony Kelly added: “The portfolio diversification offered by private credit exposure is a key aspect of this new fund, but just as important is the diversified nature of the fund’s holdings themselves.

“By not limiting the universe of private credit opportunities to a single underwriter, PCMM is better equipped to provide investors with opportunities across the entire US middle market.”

Read more: $25bn Apollo/Citi deal brings private credit into the mainstream

In September State Street partnered with Apollo Global Management to create an ETF that invests in both public and private credit, which is marketed to retail investors.

Capital Group and KKR also joined forces on a similar project to launch public-private investment funds in May, while Blackstone has also moved to target wealthy individuals with semi-liquid credit and real estate funds.

Read more: Apollo exec forecasts rise in hybrid bank/private credit deals