In a year marked by economic uncertainty and evolving market dynamics, private credit has emerged as a standout asset class for investors seeking reliable income and downside protection. With public markets experiencing renewed volatility and traditional fixed-income yields remaining below historical averages, private real estate-backed debt is gaining traction not only as a compelling alternative but also as a complementary addition to diversified portfolios.
Why private credit—and why now?
Private credit refers to non-bank lending to individuals or businesses, typically secured by tangible assets. In real estate, this often means short-term loans backed by residential properties—used for renovations, new construction, or bridge financing. These investments are structured to generate income while maintaining a strong collateral position.
In 2025, private credit is gaining serious traction—not just among individual investors, but also across capital markets and major institutions. Large asset managers are significantly increasing allocations, and the rise in securitizations is further validating private credit as a mainstream investment strategy.
But despite this institutional momentum, access for everyday investors remains limited. That’s what makes opportunities like the Arrived Private Credit Fund unique: it offers access to a high-performing asset class that’s historically been difficult for retail investors to reach.
Three reasons investors are allocating more to private real estate credit:
Reliable, asset-backed income
Many private credit investments—especially those in real estate debt funds or mortgage-backed private lending—are collateralized by residential or commercial property, offering a level of downside protection that unsecured debt or equities can’t match.
Attractive yield in a high-rate, low-growth world
Economic growth is slowing—GDP is trending around 2%, down from the historical 3% target¹. That may sound small, but it’s a 33% drop in expectations across a massive economy. In this low-growth environment, public market yields remain low and Treasuries offer limited upside. Private credit stands out for its income potential. The Arrived Private Credit Fund, for example, targets a 7–9% annualized yield (net of fees and expenses) and has consistently delivered an 8.1% annualized return with monthly distributions.
Short-duration, flexible structures
Unlike long-term bonds, private credit loans are typically shorter in duration, allowing capital to be redeployed more frequently and adjusted to shifting market conditions. This short-term structure provides investors with optionality and lower exposure to interest rate risk—a critical benefit in today’s flat yield curve environment, where long-term debt isn’t being adequately rewarded.
Navigating the 2025 economic climate
As of mid-2025, the macroeconomic landscape is shaped by elevated interest rates, slowing inflation, and persistent uncertainty. Following an aggressive tightening cycle that commenced in March 2022, the Federal Reserve increased the federal funds rate to 5.5% by July 2023—its highest level in over two decades. Since then, the Fed has held rates steady or made small cuts, maintaining a high-rate environment that has now persisted for nearly two years.
This sustained shift marks a stark contrast to the near-zero rates of the pandemic era. For investors who spent over a decade in a low-yield environment, today’s high-yield savings accounts and short-term instruments are redefining expectations. People are now conditioned to expect real returns from yield, which is fueling demand for asset classes—like private credit—that offer even higher income potential with manageable risk.
Meanwhile, the yield curve remains flat, with short-term and long-term interest rates nearly equal. That means long-duration debt isn’t being compensated with meaningfully higher returns, which reduces investor appetite for locking up capital in the long term. Adding to this, tariff-related uncertainty continues to push up 10-year Treasury yields and mortgage rates, making capital markets more cautious and credit less accessible.
In this context, investors are turning to strategies that prioritize yield, capital preservation, and optionality. Asset classes like private credit stand out for offering:
- Attractive yield potential without high exposure to market volatility
- Shorter-duration, asset-backed investments that help mitigate downside risk
- Diversification from equities and public REITs, which remain rate-sensitive and economically cyclical
Private credit isn’t just a yield play—it’s a response to a structural change in how investors think about risk, income, and flexibility in a post-zero-rate world.
Private credit is going mainstream
What was once the domain of institutional investors is quickly becoming a pillar of modern portfolios. According to Morgan Stanley, global private credit is projected to grow from $1.5 trillion in early 2024 to $2.6 trillion by 2029¹, driven by increased demand for yield, more limited access to traditional credit, and structural shifts in how both institutions and individuals allocate capital.
This rising adoption isn’t just about size—it’s about accessibility. Platforms like Arrived are helping open the door to asset classes that have historically been out of reach for most investors. As private credit cements itself as a core holding for more wealth managers and institutions, individuals now have the tools to participate in this growth with transparency, diversification, and lower minimums.
Arrived’s private credit strategy
The Arrived Private Credit Fund is built to deliver consistent monthly income by investing in a diversified portfolio of residential real estate-backed loans. These loans support projects led by experienced real estate developers and are carefully underwritten with capital preservation as a core priority.
Key highlights:
- Historic Yield: 8.1% annualized dividend paid since launch
- Quarterly liquidity available
- Diversified pool of real estate-backed loans
- Monthly dividend payouts
While all investments involve risk, including the potential loss of principal, this strategy may appeal to income-focused investors seeking to diversify beyond equities and traditional fixed income, with lower correlation to public market swings.
Conclusion: a steady hand amid market shifts
As investors reassess their portfolios in 2025, many are opting for private real estate credit as a means to generate consistent income while mitigating risk. Whether as a complement to traditional real estate equity investments or as a standalone income strategy, the asset class can offer a blend of security, stability, and income potential that resonates in today’s economic environment.
For investors interested in private credit, the Arrived Private Credit Fund provides a streamlined way to gain exposure—featuring low investment minimums, regular reporting, and a passive approach tailored for today’s investors.
