A groundbreaking financial innovation has just hit the market with the launch of the SPDR SSGA Apollo IG Public & Private Credit ETF, trading under the ticker PRIV. This first-of-its-kind fund represents a watershed moment for the $1.6 trillion private credit industry, now making these previously exclusive investment opportunities accessible to everyday investors. The new private credit ETF provides access to investment grade private credit assets to all investors, the SEC has allowed 35% of the fund’s assets to be in illiquid assets.
The collaboration between State Street Global Advisors and Apollo Global Management brings significant institutional expertise to this pioneering product. Trading on the NYSE as of February 27, 2025, PRIV aims to invest at least 80% of its assets in investment grade credit instruments, with private credit components sourced by Apollo Global Securities. With a competitive expense ratio of 0.70%, this innovative ETF provides investors an entry point to a previously inaccessible asset class that has historically offered attractive risk-adjusted returns.
Overview of PRIVATE Credit ETF (PRIV)
The SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) represents a new investment vehicle that combines both public and private credit instruments in an ETF structure. This first-of-its-kind fund aims to open access to investment-grade private credit markets for retail investors.
Investment Strategy and Objectives
PRIV employs an active management approach focused primarily on investment-grade debt securities across both public and private credit markets. The fund’s primary objective is to maximize risk-adjusted returns while providing current income to investors.
The investment strategy involves strategic allocation across a diverse range of investment-grade debt instruments. This diversification helps mitigate risks typically associated with private credit investments.
By combining private credit with traditional public fixed income securities, PRIV offers investors potential yield enhancement opportunities without significantly increasing the risk profile. The portfolio managers actively adjust allocations between public and private credit based on market conditions and relative value opportunities.
Structure of PRIV
PRIV is structured as an actively managed exchange-traded fund, making it more accessible than traditional private credit investments that often require high minimum investments. This ETF structure provides daily liquidity, transparency, and lower investment minimums compared to traditional private credit funds.
The fund is managed by State Street Global Advisors in partnership with Apollo, combining expertise from both traditional ETF management and private credit markets. This collaboration brings institutional-quality private credit expertise to retail investors.
PRIV’s structure includes a mix of directly originated private loans and publicly traded fixed income securities. The ETF trades on major exchanges, allowing investors to buy and sell shares throughout the trading day at market prices.
This innovative structure helps overcome traditional barriers to private credit markets, including lock-up periods and high investment minimums that typically restrict access to institutional or high-net-worth investors.
Key Players Backing PRIV
The groundbreaking PRIV ETF emerges from a strategic partnership between two financial powerhouses, each bringing unique expertise to this innovative investment vehicle. Their collaboration has created what appears to be the first ETF with significant private credit exposure.
State Street Corporation Involvement
State Street Corporation, through its SPDR ETF business, serves as the fund sponsor for the SPDR SSGA Apollo IG Public & Private Credit ETF. The fund trades under the ticker “PRIV” on the New York Stock Exchange. State Street brings its extensive experience in ETF management and distribution to this partnership.
SSGA (State Street Global Advisors) handles the fund’s portfolio management responsibilities, combining public and private credit instruments to seek maximum risk-adjusted returns. The firm’s expertise in creating accessible investment vehicles has been crucial in developing this groundbreaking product.
State Street’s involvement helps bridge the gap between institutional investment strategies and retail investors seeking diversification. The company has established a 0.70% expense ratio for PRIV, balancing accessibility with the specialized management required for private credit assets.
Apollo Global Management’s Role
Apollo Global Management Inc provides essential expertise in private credit origination and management for the PRIV ETF. As one of the world’s largest alternative asset managers, Apollo has committed to originate a portion of investments specifically for the fund, a crucial factor in bringing this innovative product to market.
Apollo’s involvement gives PRIV a competitive advantage by ensuring a steady pipeline of private credit opportunities. The firm’s deep relationships across corporate America provide access to investment-grade private debt that would normally be unavailable to retail investors.
The partnership leverages Apollo’s credit assessment capabilities and market insights to maintain the fund’s investment-grade focus. Their expertise in structured credit and private lending adds significant value to PRIV’s actively managed approach.
Apollo’s role extends beyond mere security selection to include ongoing credit analysis and monitoring, providing institutional-quality oversight to this retail-accessible product.
The Private Credit ETF Prospectus
PRIV offers investors access to a diversified portfolio that spans both public and private credit markets with a focus on investment-grade securities. The fund’s strategy aims to maximize risk-adjusted returns while providing current income through a strategic allocation across various debt instruments. You can read the investment prospectus here.
Public and Private Credit Assets
The SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) represents a new approach to credit investing (for the everyday investor) by combining both public and private credit instruments in a single ETF structure. This innovative approach allows all investors to tap into markets previously accessible only to institutional investors.
The fund has flexibility to invest up to 15% of its assets in private funds, interval funds, or business development companies as part of its private credit allocation. Unlike many traditional fixed income ETFs, PRIV does not maintain fixed allocation targets between public and private credit.
Instead, the portfolio managers employ active management to shift allocations based on market conditions and opportunities. This dynamic approach allows the fund to potentially capture yield premiums available in less liquid markets while maintaining sufficient portfolio liquidity.
Investment-Grade Debt Securities Focus
PRIV maintains a primary focus on investment grade debt securities across both public and private markets. This investment-grade emphasis aims to deliver more stable returns with lower default risk compared to high-yield alternatives.
The fund’s investment universe includes:
- Corporate bonds
- Asset-backed securities
- Commercial mortgage-backed securities
- Private direct lending to investment-grade companies
- Private structured credit
Risk management stands at the core of the investment process, as highlighted by State Street Global Advisors’ Active Fixed Income Team. The portfolio undergoes rigorous credit analysis to identify opportunities with favorable risk-reward characteristics.
By democratizing access to investment-grade private credit, PRIV provides individual investors with exposure to an asset class traditionally reserved for large institutional investors. This approach potentially delivers enhanced yield without significantly increasing credit risk.
Risk-Adjusted Returns Strategy
The SPDR SSGA Apollo IG Public & Private Credit ETF (PRIV) specifically aims to maximize risk-adjusted returns alongside current income. This dual objective drives the fund’s investment decisions across both public and private credit markets.
Risk management begins with PRIV’s focus on investment-grade debt securities, which inherently carry lower default risks than high-yield alternatives. This foundation provides stability while still offering yield advantages compared to traditional fixed income.
The fund leverages Apollo’s expertise in credit analysis to evaluate potential investments against their risk profiles. This process includes comprehensive assessment of issuer creditworthiness, covenant structures, and recovery values.
Diversification serves as another key risk mitigation tool. By spreading investments across sectors, industries, and credit types, PRIV reduces concentration risk that could otherwise amplify potential losses during market stress periods.
Disclaimer:
This post contains mentions of publicly traded securities. This post is not a recommendation to buy, sell, or trade said securities. Please visit my personal portfolio to see my financial positions for clarity of my biases or inclinations.