Investment banks are using credit secondaries as a seeding strategy to launch dedicated private credit funds and asset management businesses.
Most recently, Jefferies Finance moved nearly 50 loans worth $1bn from its balance sheet into its inaugural European direct lending fund in a secondaries transaction. Allianz Global Investors led the transaction and anchored the fund with a stapled primary commitment, sources said. AllianzGI declined to comment on transaction specifics.
In 2024 and 2025, Sumitomo Mitsui (SMBC) and Investec Bank also rolled out inaugural direct lending funds, anchored by a combination of stapled primary commitments and GP-led secondary transactions.
It’s a tactic that lets bank lenders get a foothold in the estimated $4.1trn — and growing — private credit market, allowing them to scale in a way they can’t do on their own since their balance sheets are finite, sources told 9fin.
The playbook for using credit secondaries to seed a fund is fairly straightforward. The investment bank will originate and lend using its own money, hold the private credit loans on its balance sheet, bring in a secondaries investor who will buy all or some of those loans, then sell them into a dedicated investment fund.
It’s also a way...
