Private credit is attracting growing attention from institutional capital allocators, retail platforms, and the financial media alike. And with that spotlight comes a wide range of views. JPMorgan Chase CEO Jamie Dimon has publicly cautioned that risks in the space could emerge in clusters, warning that defaults in one pocket may signal broader vulnerabilities.¹ Meanwhile, Apollo’s Marc Rowan has taken a more bullish stance, emphasizing that private credit is widely misunderstood and, when properly underwritten, can outperform public markets in both return and safety.²
So who’s right? In truth, both perspectives matter because “private credit” is not a monolithic asset class. There’s a fundamental difference between corporate lending and asset-backed loans tied to income-generating real estate. At Arrived, we concentrate on the latter.
Our focus on real estate-secured lending offers distinct advantages in today’s market, where investor demand for income, downside protection, and lower correlation to public equities is at a premium. Here’s why we believe a disciplined approach to residential credit, anchored by strong collateral and conservative underwriting, offers a differentiated way to participate in private credit.
The role of strong collateral: Disciplined asset selection can provide an additional margin of safety
Dimon’s concerns are largely aimed at parts of the market where underwriting is weak, and loans that are unsecured or backed by rapidly depreciating assets. In contrast, the loans held within the Private Credit Fund are secured by physical real estate assets.
Each loan is secured by a tangible real estate asset that goes through a robust due diligence process. In the event of borrower default, the property securing the loan may be repossessed and sold to help recover capital. This collateral structure can influence the overall risk profile, offering a layer of protection not present in unsecured investments.
The importance of conservative underwriting
The Arrived credit strategy takes a comprehensive, multi-layered approach to underwriting residential real estate credit.
We begin with a top-down evaluation of each loan originator. This includes reviewing their track record, management team, financial stability, underwriting guidelines, and market reputation. We assess how loans are sourced, structured, and serviced to determine whether the originator’s credit philosophy aligns with our investment criteria.
From there, we adopt a bottom-up perspective, evaluating individual loans to ensure the risk is priced appropriately. Our focus is on lending to experienced real estate borrowers with strong credit or a proven track record of successfully completing projects. We prioritize repeat operators who have demonstrated the ability to navigate changing market conditions.
Each loan is underwritten using conservative property valuations and focuses on high-demand neighborhoods within top U.S. metro areas. These may range from established, higher-income communities to up-and-coming areas with strong growth potential. By concentrating on markets with healthy job growth, population trends, and housing demand, we aim to strike the right balance between opportunity and risk.
We apply a middle-out approach by actively monitoring loan performance, structuring representations and warranties, and layering in originator surveillance to manage portfolio-level risk. This enables us to respond quickly to changing market conditions and refine our strategy as needed. A core component of our credit thesis is investing in Residential Transition Loans (RTLs)—short-term, asset-backed loans underwritten to conservative cost bases. RTLs offer flexibility, allow for rapid repricing of risk, and provide multiple repayment paths, including sale, refinance, or liquidation. Because borrowers are experienced operators with equity at stake, RTLs generally offer more control and downside protection than traditional long-duration mortgages. Our structuring approach further supports capital preservation through contractual safeguards and robust surveillance tools.
Through this disciplined and dynamic credit framework, we aim to identify high-quality opportunities that align with our long-term focus on risk-adjusted performance.
Lower correlation to public markets
Like many private credit products, real estate-backed lending has a lower correlation with public equities and bonds. But in our case, that benefit comes with the added protection of secured, tangible assets and bespoke structuring.
The result is a differentiated yield strategy that targets income generation through high-quality, collateralized loans while maintaining a strong focus on principal protection.
Final thought: Focus on strategy, structure, and safeguards
When evaluating private credit opportunities, it’s important to look beyond the headline yield. What types of loans is the fund targeting? What collateral supports those loans? How is risk managed across the portfolio?
At Arrived, our approach emphasizes real estate-secured lending, conservative underwriting, and structuring credit enhancements—all designed to offer a thoughtful balance of income potential and downside protection. We believe private credit can be a compelling strategy when built on a foundation of discipline, transparency, and strong collateral.
