State Street Global Advisors and Apollo Global Management are making a bold move with a new ETF that challenges the usual rules around private credit. Trading under the ticker PRIV, this fund pushes past the traditional 15 percent cap on illiquid assets in open-ended funds. Normally, the SEC limits how much a fund can hold in private credit because these loans don’t trade as easily as public bonds. But SSGA and Apollo are working around that by changing how liquidity is defined.
Here’s how it works: Apollo will provide private credit investments to the fund and also agree to buy them back up to a certain limit each day. That setup allows these assets to count as “liquid” under SEC rules, even though private credit typically isn’t something you can sell quickly in big quantities. This means the ETF could have anywhere from 10 to 35 percent of its portfolio in private credit—maybe even more, depending on market conditions and what the managers decide.
So, why does this matter? Private credit is basically lending done outside of traditional banks. It’s been a go-to for big institutional investors like pension funds and endowments because it offers higher yields than public bonds. The trade-off? More risk. These loans often go to companies with weaker credit ratings, and there isn’t a deep market for selling them if things go south. For retail investors, the appeal is obvious—higher returns and access to a market usually off-limits. The challenge is liquidity: if things get rocky, selling could get tough, even with Apollo’s buyback promise.
This ETF is breaking new ground, and its success (or failure) could shape the future of private credit in public markets. If it works, we could see more funds pushing past the old liquidity limits, giving investors more ways to tap into private credit. But if Apollo struggles to provide liquidity when it’s really needed, it could expose risks that regulators and investors aren’t fully accounting for yet. Either way, this is a big step toward making private credit more accessible—and Wall Street will be watching closely to see how it plays out.
