August Insights Newsletter
The Next Big Shift in Real Estate Investing: Private Credit
By Nina Hobson
Private credit, once reserved for institutional investors and the ultra-wealthy, is one of the fastest-growing financial segments. Thanks to new fund structures and digital platforms, individual investors with as little as $1,000 can now invest in what used to be a high-barrier market.
This shift is doing more than changing portfolios, it’s reshaping how capital flows into real estate deals, particularly in competitive markets like Southern California.
Opening the Door to More Investors
As Huw van Steenis, Vice Chair at Oliver Wyman, recently wrote in a Financial Times op-ed, “Private credit is undergoing a quiet transformation. Product innovation and tech advances are rapidly opening the door to a new class of investor.”
What once required insider connections and $250,000 commitments is becoming accessible through structures like evergreen funds and private REITs, which allow investors to enter and exit periodically without the rigid lockups of traditional private vehicles.
“Evergreen funds… are transforming access,” van Steenis explained in the Financial Times. “One key reason is the ability to put funds to work right out of the gate, unlike so-called drawdown funds which make complex cash demands on investors.”
Technology Is Closing the Gap
Technology is making investing in private credit easier, with digital platforms simplifying onboarding, documentation, and reporting. As Huw van Steenis noted, “Private assets have historically been a heavy lift, but this is being streamlined into something closer to buying a mutual fund.”
What It Means for Borrowers
For real estate borrowers, this changing landscape means faster, deeper, and more flexible access to capital. As more individual investors participate in private credit, non-bank lenders are benefiting from increased liquidity and greater capacity to fund a wide range of projects — from value-add construction to fix-and-flips to ground-up construction.
“We see a huge win-win opportunity to match private fund capital with the financing needs of strong real estate borrowers just as traditional sources of capital like banks become more constrained,” says Charlie Woo, President of Fidelity Bancorp Funding.
With this influx of private capital, real estate investors have more opportunities to move quickly and strategically in competitive, high-demand markets.
What It Means for Investors
For investors, private credit is becoming a core strategy in diversified portfolios. Many are adopting what van Steenis describes as a “barbell effect,” combining low-cost bond ETFs on one end with higher-yielding, less liquid private credit on the other. This approach, long used in equity investing, is now reshaping fixed income strategies and it has “a very long way to run.”
Bridge lending, particularly when backed by real estate, provides a way to access stable, secured returns while participating in an asset class that has historically been limited to institutional players.
Looking Ahead
The growth ahead is significant. Affluent individuals now account for roughly 12 percent of private credit assets at leading firms, and Oliver Wyman estimates that figure could double or even quadruple in the next five years.
“Private credit is likely to become a component in diversified credit portfolios — including managed investment accounts,” van Steenis wrote in the Financial Times.
We’re also watching the potential for regulatory changes that could allow retirement accounts (like 401(k)s) to access private assets, as well as the rise of new investment platforms and strategic partnerships between asset managers and direct lenders.
Fidelity’s Perspective
Fidelity, as both a direct lender and a private REIT that has been open to individual investors since its inception, sees this as a positive trend, one that bridges the capital urgently needed by borrowers with an expanding set of private market opportunities for investors.
Daryl Wilson Launches Texas Region for Fidelity
Fidelity Bancorp Funding is excited to welcome Daryl Wilson as our new Associate Director of Lending. Based in Dallas, Daryl leads our entrance into the Texas market as the company expands beyond its strong West Coast foundation. With nearly a decade in mortgage banking, asset management, and portfolio leadership, Daryl has a proven track record of building high-performing teams. His leadership and expertise will play a key role in strengthening Fidelity’s lending platform and enhancing the service we provide to clients across the region.
Investor Insights
Loan of the Month
$7.5 million bridge loan for a 30-unit multifamily in Murray, UT. Tara Sauerbrey’s proactive approach and attention to detail ensured a smooth, timely close without the typical delays and hurdles of traditional bank financing.
