Course

Introduction to private credit and public-private solutions

Course summary

Learn how to...

What you’ll get

Who can benefit

Welcome video

Start your journey with this introductory video. Emma Friend, public-private solutions & ETF marketing lead at Capital Group, will introduce you to the course, the topics covered and how best to get started.

4MINVIDEO

Choose a pathway to get started

We've designed these materials so that you can learn at your own pace and engage with what you find most compelling and informative. The materials sequentially form one course, but feel free to explore the modules as you wish.



 

Below are three recommended pathways for common learning needs. Choose the pathway that is best for you to get started. With every pathway, you will learn through short (<10 minute) content in videos, readings and data explorations.

 

We recommend that you engage at your own pace, splitting your learning into 20–30 minute sessions across 1–2 weeks.

Excited to learn? Take the full course

Already know the basics? Skip ahead

Short on time? Take the express pathway

Three modules, one goal

 

This course is designed to provide a comprehensive understanding of private credit and its role in public-private solutions. It is structured into three modules:

 

Module 1: Introduction to public-private solutions

ABOUT 4 HOURS

Explore the foundational concepts of public-private investing. Learn all about private markets and credit, interval funds and how they're used in public-private solutions. We recommend starting here if you aren't already familiar with private credit and related products.

 

Module 2: Positioning public-private solutions for investors

ABOUT 2.5 HOURs

Learn how to effectively integrate these solutions into investment strategies. You'll explore how to manage liquidity, consider the purpose and strategy of private investment in a portfolio and weigh the risks and opportunities of investment. We recommend starting here if you are already familiar with the basics around private markets and are interested in learning about new solutions you can implement in your client portfolios.

 

Module 3: Investing in Public-Private+ Solutions

ABOUT 90 MINUTES

Dive into the specifics of selecting and managing assets within this category. You'll learn the details of real public-private solutions in this space, and how to consider which are right for your clients.

 

Within each module, lessons are listed in the right sidebar of the page for easy access. Modules can be accessed by clicking their names in the navigation bar at the top of the page. You can also return to this page at any time and select "Continue" to pick up right where you left off.

Three modules, one goal

This course is designed to provide a comprehensive understanding of private credit and its role in public-private solutions. It is structured into three modules:

ABOUT 4 HOURs

Explore the foundational concepts of public-private investing. Learn all about private markets and credit, interval funds and how they're used in public-private solutions. We recommend starting here if you aren't already familiar with private credit and related products.

ABOUT 2.5 HOURs

Learn how to effectively integrate these solutions into investment strategies. You'll explore how to manage liquidity, consider the purpose and strategy of private investment in a portfolio and weigh the risks and opportunities of investment. We recommend starting here if you are already familiar with the basics around private markets and are interested in learning about new solutions you can implement in your client portfolios.

ABOUT 90 MINUTES

Dive into the specifics of selecting and managing assets within this category. You'll learn the details of real public-private solutions in this space, and how to consider which are right for your clients.

 

Within each module, lessons are listed in the right sidebar of the page for easy access. Modules can be accessed by clicking their names in the navigation bar at the top of the page. You can also return to this page at any time and select "Continue" to pick up right where you left off.

For financial professionals only. Not for use with the public.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the interval fund prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

Consider the following risks for the Capital Group KKR fund(s) discussed in this material: The fund is an interval fund that provides liquidity to shareholders through quarterly repurchase offers for up to 10% of its outstanding shares under normal circumstances. To the extent more than 10% of outstanding shares are tendered for repurchase, the redemption proceeds are generally distributed proportionately to redeeming investors (“proration”). Due to this repurchase limit, shareholders may be unable to liquidate all or a portion of their investment during a particular repurchase offer window. In addition, anticipating proration, some shareholders may request more shares to be repurchased than they actually wish, increasing the likelihood of proration. Shares are not listed on any stock exchange, and we do not expect a secondary market in the shares to develop. Due to these restrictions, investors should consider their investment in the fund to be subject to illiquidity risk.

Investment strategies are not guaranteed to meet their objectives and are subject to loss. Investing in the fund is not suitable for all investors. Investors should consult their investment professional before making an investment decision and evaluate their ability to invest for the long term. Because of the nature of the fund's investments, the results of the fund's operations may be volatile. Accordingly, investors should understand that past performance is not indicative of future results.

Bond investments may be worth more or less than the original cost when redeemed. High‐yield, lower‐rated, securities involve greater risk than higher‐rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not. The fund may invest in structured products, which generally entail risks associated with derivative instruments and bear risks of the underlying investments, index or reference obligation. These securities include asset-based finance securities, mortgage-related assets and other asset-backed instruments, which may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market's perception of issuer creditworthiness; while generally supported by some form of government or private guarantee, there is no assurance that private guarantors will meet their obligations. While not directly correlated to changes in interest rates, the values of inflation-linked bonds generally fluctuate in response to changes in real interest rates and may experience greater losses than other debt securities with similar durations. The use of derivatives involves a variety of risks, which may be different from, or greater than, the risks associated with investing in traditional securities, such as stocks and bonds. For example, the fund may purchase and write call and put options on futures, giving the holder the right to assume a long (call) or short (put) position in a futures contract at a specified price. There is no assurance of a liquid market for any futures or futures options contract at any time. Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries.

The fund invests in private, illiquid credit securities, consisting primarily of loans and asset-backed finance securities. The fund may invest in or originate senior loans, which hold the most senior position in a business's capital structure. Some senior loans lack an active trading market and are subject to resale restrictions, leading to potential illiquidity. The fund may need to sell other investments or borrow to meet obligations. The fund may also invest in mezzanine debt, which is generally unsecured and subordinated, carrying higher credit and liquidity risk than investment-grade corporate obligations. Default rates for mezzanine debt have historically been higher than for investment-grade securities. Bank loans are often less liquid than other types of debt instruments and general market and financial conditions may affect the prepayment of bank loans, as such the prepayments cannot be predicted with accuracy.

Illiquid assets are more difficult to sell and may become impossible to sell in volatile market conditions. Reduced liquidity may have an adverse impact on the market price of such holdings, and the fund may be unable to sell such holdings when necessary to meet its liquidity needs or to try to limit losses, or may be forced to sell at a loss. Illiquid assets are also generally difficult to value because they rarely have readily available market conditions. Such securities require fair value pricing, which is based on subjective judgments and may differ materially from the value that would be realized if the security were to be sold.

The fund is a non-diversified fund that has the ability to invest a larger percentage of assets in the securities of a smaller number of issuers than a diversified fund. As a result, poor results by a single issuer could adversely affect fund results more than if the fund were invested in a larger number of issuers. The fund intends to declare daily dividends from net investment income and distribute the accrued dividends, which may fluctuate, to investors each month. Generally, dividends begin accruing on the day payment for shares is received by the fund. In the event the fund's distribution of net investment income exceeds its income and capital gains paid by the fund's underlying investments for tax purposes, a portion of such distribution may be classified as return of capital. The fund's current intention not to use borrowings other than for temporary and/or extraordinary purposes may result in a lower yield than it could otherwise achieve by using such strategies and may make it more difficult for the fund to achieve its investment objective, than if the fund used leverage on an ongoing basis. There can be no assurance that a change in market conditions or other factors will not result in a change in the fund distribution rate at a future time.

This material does not constitute legal or tax advice. Investors should consult with their legal or tax advisors.
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.
All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.
KKR Credit Advisors (US) LLC serves as the sub-adviser with respect to the management of the fund's private credit assets. Capital Group (the "Adviser") and KKR are not affiliated. The two firms maintain an exclusive partnership to manage and deliver public-private investment solutions to investors.
Use of this website is intended for U.S. residents only. Use of this website and materials is also subject to approval by your home office.
Capital Client Group, Inc.
This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.