Key points
Open architecture has become the norm in independent wealth management. Clients expect their adviser to look across the whole market, not just a bank's product shelf. For a growing number of independent wealth managers, external asset managers (EAMs) and boutique advisory firms, that now includes private credit.
The difficulty is access. Most structured and private credit sits in private deals that never appear on a platform. The ones that do arrive often come wrapped in fund structures that are awkward to hold in client custody accounts, or with terms that are hard to explain. And in a market crowded with alternatives, many poorly structured or opaque, filtering signal from noise is the adviser's real job.
This guide explains why independent wealth managers are allocating to structured credit, how they access it, how to think about suitability, and the due diligence questions that separate a sound note from a weak one.
Why independent wealth managers are allocating to structured credit
The case starts with what clients want. Many high-net-worth clients are looking for stable income that does not move in step with public markets. The traditional 60/40 portfolio delivered that for decades; the correlation between bonds and equities in recent years has made it less reliable.
Advisers are responding. Hamilton Lane's 2026 Global Private Wealth Survey found that 86% of private wealth professionals plan to increase private market investments in 2026, with private credit already making up around 16% of their private markets allocations. The same survey found 81% say client education significantly increases interest.
Structured credit suits that demand for several reasons.
- Contractual income: coupons are set by the note terms, often paid monthly or quarterly.
- Defined downside: security, seniority and the capital beneath the investor's position are written into the documents.
- Diversification: exposure to consumer credit, receivables or specialist lending, which behave differently from listed corporate debt.
- Shorter duration: many asset-based structures amortise over one to three years, rather than locking capital up for a decade.
- Independence: these opportunities do not sit on legacy product shelves. Finding and assessing them is a way for an adviser to show the whole-of-market selection clients are paying for.
What kinds of structured credit reach wealth portfolios
The structured credit now reaching wealth managers is mostly asset-backed and transparent, a long way from the synthetic complexity of 2008. Common types include:
- Credit linked notes referencing loans to businesses or loan books of specialist lenders. Our guide to credit linked notes explains how they work.
- Asset-based lending secured on real estate, vehicles, equipment or receivables.
- Special situations credit, such as litigation finance or tax receivables.
- Consumer credit strategies, including the purchase and restructuring of distressed private student loans.
The last example shows how specialised some of these strategies are. US student debt stood at around $1.86 trillion in Q1 2026, of which roughly $167bn is private, according to Federal Reserve and Education Data Initiative figures compiled by SoFi. Private loans cannot be forgiven or deferred as easily as federal loans, and borrowers in distress have few options. Some US managers buy defaulted or severely delinquent private loans at deep discounts, re-underwrite the borrowers, and offer new, affordable repayment plans. Once a restructured loan has a record of clean payments, it can be held for income or sold at a higher price. It is a cashflow-producing strategy that also helps borrowers out of distress, and it needs specialist servicing to work.
Our piece on private credit through structured credit explains how exposures like these are packaged into notes.
How advisers access structured credit: the ISIN route
For an independent wealth manager, the practical question is often how a private credit position fits into the client's existing custody arrangements. There are three broad routes.
| Access route | How it is held | Onboarding | Reporting | Liquidity |
|---|---|---|---|---|
| Direct bilateral loan | Loan agreement in the client's name | Legal documents per deal | Manual, outside custody | Held to maturity |
| Private credit fund or feeder | Fund units via a transfer agent | Subscription documents per fund | Fund statements, often quarterly | Redemption windows or secondary sale |
| Note with an ISIN (e.g. CLN) | Security in the client's custody account | Booked like a bond through the custodian | Appears in standard portfolio reporting | Usually held to maturity |
A note with an ISIN can be settled through the major clearing systems and held at the client's custodian bank, next to listed bonds and equities. That keeps valuation, reporting and fee calculation inside the systems the adviser already uses, and avoids a separate subscription process for each investment. Our explainer on what an ISIN is covers the mechanics. Custodians apply their own acceptance policies, so advisers should confirm a note is bookable before recommending it.
Suitability: who can invest
Structured private credit notes are generally offered by private placement to professional investors, not to the retail public. The precise test depends on the client's jurisdiction and the adviser's regulator, and the adviser remains responsible for suitability.
In practice, that means checking four things before allocating: that the client qualifies as a professional investor where they live; that they understand the product and its risks; that the position is sized so the client can hold it to maturity without strain; and that it does not create a concentration in one originator, sector or structure. Minimum investment sizes and the client's certification status are as much a part of the decision as the coupon.
Due diligence: the questions to ask
A strong selection framework turns a pitch into a decision. Before committing client capital, an adviser should be able to answer the following.
- Underlying assets: what exactly backs the note, how are the loans selected, and what does their historical performance look like?
- Originator and servicer: who made the loans, who collects them, and what happens if the servicer fails?
- Structure and ranking: where does the note sit in the capital stack, and how much capital absorbs losses first?
- Legal ring-fencing: is the issuing vehicle or compartment bankruptcy-remote, and is the security properly perfected?
- Reporting and valuation: how often will performance be reported, by whom, and how is the note valued?
- Liquidity and exit: what is the term, is there any route to early exit, and what happens at maturity?
Governance questions belong on the same list: how conflicts of interest are managed, who approves each transaction, and how client data is protected. Our guide to governance in private credit covers what good looks like.
The risks advisers need to explain
- Illiquidity: many structures have terms of 12 to 36 months with limited or no early exit.
- Counterparty risk: the manager, servicer and originator all matter, as well as the collateral.
- Default and re-default: even restructured or seasoned loans can default, so ongoing monitoring is essential.
- Complexity: if the adviser cannot explain the waterfall to the client in plain terms, the client should not own it.
Our credit risk and credit linked notes FAQs answer the questions clients ask most often.
What this means for investors
For independent wealth managers, structured credit is an opportunity to give clients something a model portfolio cannot: contractual income from real lending activity, with protection defined in the documents and exposure that sits outside the usual public market drivers.
The responsibility that comes with it is real. These are private deals with private access and genuine diligence requirements. The advisers who do well with them are those who size positions to clients' time horizons, insist on transparency about the assets and the structure, and remember that an ISIN makes a note easier to hold; it does nothing to make it easier to sell.
At Kingsbury & Partners we place senior secured private credit, structured through bankruptcy-remote credit linked note compartments of our Luxembourg vehicle, with professional investors, family offices and financial intermediaries, including wealth managers. Whoever an adviser works with, the test is the same: can you see what you own, and do you understand what protects it?
Frequently Asked Questions
What is an independent wealth manager?
An independent wealth manager, often called an external asset manager (EAM) in Switzerland, manages client portfolios without being tied to a single bank, holding client assets at one or more custodian banks of the client's choosing.
Why are wealth managers investing in private credit?
Clients want income and diversification beyond public bonds and equities. Private credit offers contractual, often floating-rate returns from lending that public markets do not reach.
How can a wealth manager access structured credit for clients?
Most commonly through notes with an ISIN, such as credit linked notes, which can be booked in a client's custody account, or through private credit funds and feeder vehicles.
Is structured credit suitable for private clients?
Only for clients who qualify as professional investors, understand the risks and can hold the investment to maturity. It should be sized as part of a diversified portfolio.
What due diligence should advisers carry out on structured credit?
Review the underlying assets, the originator and servicer, the note's position in the capital structure, the legal ring-fencing, the reporting and valuation process, and the terms for exit.
Can structured credit notes be sold before maturity?
Sometimes, but secondary markets for private notes are thin. Advisers should assume clients will hold to maturity.