Credit secondaries
Is a gross 14-15% and net 12% IRR decent for a credit secondaries fund if it uses no leverage? Thx
Trending Content - Credit Forum
Career Resources
WSO Free Modeling Series - Now Open Through
November 30, 2026
9 Free Financial Modeling Lessons
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
+Bonus: Get 27 financial modeling templates in swipe file
+Bonus: Get 27 financial modeling templates in swipe file
High Finance Applications
Guaranteed
Get at least one offer GUARANTEED
- 1:1 support
- 92% success rate
- 2,000+ mentor network
- Unlimited Live bootcamps
- AI for resume + LinkedIn
- Networking automation tools
- HireVue simulation tool
- Full course library
- Private Slack community
- 20hrs of mocks
- + much more...
Based on the WSO Dataset, a gross IRR of 14-15% and a net IRR of 12% for a credit secondaries fund that uses no leverage can be considered decent. Typically, the use of leverage can amplify returns, so achieving these levels without leverage indicates a solid performance. It's important to compare these figures with the specific benchmarks and expectations for the credit secondaries market, which often looks for higher returns when leverage is employed. However, a fund operating without leverage and still delivering a 12% net IRR is managing risk well while providing a reasonable return.
Sources: Private Credit Secondaries Case Study Insight, What kind of returns are LPs targeting in opportunistic funds these days?, Do you think it's justifiable to ask for 25% of the GP for being the fund raiser for the projects?, Secondary PE Modeling, Sensitivities......
Were they buying high quality direct lending funds or were they buying steeply discounted opportunistic funds?
Direct lending LP secondaries or doing low LTV NAV loans
I don't have actual experience in the space, but seems pretty decent. Assuming they have a senior position where they aren't the first impaired in the fund meaning between equity cushion at the borrowco and "equity cushion" at the fund they should be in a pretty safe position meaning that yield sounds attractive. But not sure if that's the structure
Tempore fugiat est blanditiis nisi beatae. Aut placeat iure debitis quaerat labore. Doloremque omnis officiis incidunt distinctio et maiores. Voluptate a eveniet similique. Voluptatibus provident totam vitae reiciendis eius. Excepturi magnam commodi porro quisquam molestiae cum earum saepe.
Et eum praesentium debitis odit sit quidem. Unde ut voluptatem velit. Amet aut cum quis sit. Cupiditate voluptatem velit consequuntur ut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...