The noise surrounding private credit is impossible to ignore. The global market has swelled to over $1.7 trillion, fueled by a widespread search for returns in a volatile landscape. The promise of a high, stable yield—often insulated from public market volatility—is a powerful magnet. For investors willing to trade liquidity for potentially higher returns, it has emerged as a compelling option.
But for the founder, the consultant, the CEO of a "Business-of-One," chasing yield is only half the story. When your personal wealth and business capital are inextricably linked, every investment is also a risk management decision. The real questions, the ones that demand a CFO’s mindset, are about liquidity, control, and the labyrinth of cross-border compliance that other guides conveniently ignore. An investment in one country can trigger costly and unforeseen tax implications in another, turning a promising return into a logistical nightmare.
This is not another article hyping alternative investments. This is a playbook for your specific situation. We will move beyond generic advice to provide a clear, three-part strategic framework:
This framework is your guide to transforming a complex instrument like private credit from a source of uncertainty into a tool for building long-term, resilient wealth.
A professional lens separates a speculative chase for yield from a strategic capital allocation. Before you analyze a single fund or platform, the most critical phase is an honest qualification of your own financial structure. For a global professional, this demands thinking less like a passive investor and more like the acting CFO of your own enterprise.
The first hurdle is illiquidity. Private credit means forgoing access to your capital, often for three to ten years. A simple six-month emergency fund is an inadequate benchmark for a "Business-of-One." Your analysis must be more sophisticated, mapping capital needs across three categories:
Only capital that sits comfortably outside these three buckets should be considered for long-term, illiquid investments. Committing capital you might need for operations or opportunities is not an investment strategy; it's a high-stakes gamble.
Most private credit opportunities are restricted to "acredited investors," which for individuals typically means a net worth over $1 million or an annual income over $200,000. This presents a unique challenge for professionals whose income is project-based and invoiced in multiple currencies. You must be prepared to build a robust case for your status. Start by assembling a professional dossier:
For a US professional operating globally, every investment is also a tax compliance decision. Before proceeding, you must confidently answer three questions about the administrative burden:
To bring it all together, be honest about where you fall on this matrix. Only if you have a genuinely low need for this specific capital and a high tolerance for the associated administrative work does it make sense to proceed.
Having concluded that you have both the capital and the administrative tolerance, you now shift from CFO to Chief Investment Officer. This isn't about chasing the highest advertised yield; it's about methodically de-risking an inherently opaque asset class by scrutinizing the core investment strategy.
Top-tier managers can still lose money with a flawed strategy. You must understand the mechanics of how a fund generates returns and protects principal. Private credit covers several distinct approaches:
Your analysis should be grounded in a concrete set of questions for any potential investment:
Treating compliance as a core part of your analysis transforms it from a threat into a shield. As Andrew Mitchell, a Partner in International Tax at KPMG, warns,
The biggest mistake solo professionals make when investing in alternative assets from abroad is failing to understand the U.S. tax implications of the investment structure itself... [This] can wipe out any potential gains.
To avoid this, clarify how an investment interacts with your specific obligations:
The current interest rate environment creates both opportunities and risks. Because most direct lending is structured with floating-rate loans, rising rates can directly increase the yield investors receive. However, this same dynamic pressures borrowers, increasing default potential and making manager selection more critical than ever.
Finally, consider the investment structure. You can access this asset class through a private fund, a publicly traded Business Development Company (BDC), or an ETF. Each offers a different trade-off between direct access, liquidity, and tax simplicity. A private fund offers direct access but is illiquid and issues a complex K-1. A BDC or ETF provides daily liquidity and simple 1099 tax forms but offers indirect exposure. Your self-assessment from Part 1 should make the right path clear.
With your strategic decision made, the abstract analysis gives way to concrete action. This final phase is about moving from strategist to operator—methodically navigating the platforms, paperwork, and processes required to deploy your capital. A clear tactical plan transforms complexity into a straightforward checklist.
For accredited investors, a growing number of financial technology platforms now provide access to private credit. These platforms act as marketplaces, connecting investors with curated deals from various asset managers.
Here’s a practical look at two prominent players:
While these platforms are the most accessible starting point, many private equity firms and asset managers also offer direct investment into their funds for those who meet higher minimums.
The process of making your first investment is highly standardized to ensure regulatory compliance.
Your work isn't done once the funds are transferred. As the CFO of your "Business-of-One," you must integrate these illiquid assets into your financial operating system.
Accredited investors have three primary paths:
Precision is paramount. For a US expat, income from a typical private credit fund is unearned, passive income.
It presents both opportunities and heightened risks.
These are three distinct structures for accessing the asset class, each with significant trade-offs.
No. This is a critical point. Traditional private credit funds are fundamentally illiquid investments. You are committing your capital for a "lock-up period" that can last for 5 to 10 years, with very limited, if any, opportunities for early withdrawal. This illiquidity allows the fund manager to make long-term loans without being forced to sell assets at a bad time to meet investor redemptions. You must be prepared to have this portion of your capital deployed for the full life of the fund.
The granular details of lock-up periods, K-1 forms, and underwriting discipline are the building blocks of a sound investment, but they are not the decision itself. For the global professional, engaging with private credit is a deliberate business decision—a strategic allocation of capital that demands the rigor and foresight of a CFO. It is never about simply chasing the highest possible yield. It is a calculated judgment about how an illiquid, long-term asset fits into the complex, cross-border operations of your "Business-of-One."
The path to a confident decision lies in the disciplined application of the framework we have walked through:
This Qualify, Analyze, Execute playbook is more than a checklist; it is a reliable structure for your judgment, ensuring your choices are proactive and strategic, not reactive and speculative. By adopting this professional framework, you transform a complex investment vehicle from a source of anxiety into a potential tool—one you can deliberately deploy in the service of building long-term, resilient wealth for the enterprise that matters most: your own.
A certified financial planner specializing in the unique challenges faced by US citizens abroad. Ben's articles provide actionable advice on everything from FBAR and FATCA compliance to retirement planning for expats.
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