50-Point Spread in Private Credit Returns Raises Manager Risk

The 54 constituents of the VettaFi Private Credit Index posted returns between plus 20% and minus 30% during the 2025 calendar year, producing a 50-percentage-point gap across managers in the index.

Private credit typically consists of privately negotiated loans that are less liquid than public bonds. Fund managers source deals, set terms and monitor loans, and their underwriting and portfolio decisions affect performance at the fund level.

Because individual managers originate and manage most of the loans, investor outcomes can vary depending on which manager an investor chooses. Industry participants describe private credit investing as a two-step process: first an investor decides to allocate to the asset class, then the investor selects one or more managers to run the capital.

Christopher Getter, portfolio manager at Simplify Asset Management, commented during a webcast that the range of 2025 returns illustrates the variance in outcomes across managers. “If you were invested in the manager who was up 20%, you’re probably quite pleased with your exposure. On the other hand, if you were invested in the manager who had a 30% negative return, you’re probably not so happy,” he observed.

Simplify offers the Simplify Private Credit Strategy ETF (PCR) as an index-based vehicle that holds exposure to the constituents of the referenced private credit index. The ETF’s structure allocates across the index rather than to single managers. VettaFi is the index provider for that index and receives a licensing fee from PCR; VettaFi is not the issuer, sponsor or marketer of the ETF and has no role in its issuance or administration.

Investors considering private credit or related ETFs should assess liquidity, fees, portfolio construction and the fund’s tracking approach. The 2025 returns data shows that performance varied widely by manager within the index during that year.