Summary
TLDR: Funds with high yield targets use blockchain technology to reduce fees, while private credit market offers financing to small and mid-sized businesses through specialized lenders, attracting investors seeking strong returns.
Key Points
1. The high yield targets of the funds are partly a function of its on-chain structure, which cuts fees by as much as 150 basis points that would otherwise go to administrative costs.
2. In the private credit market, small- and mid-sized businesses in need of financing often turn to specialized lenders instead of banks, creating a $1.7 trillion market that caters to investors seeking strong returns.
3. Deals in the private credit market have grown significantly and now rival traditional banks, attracting investors who are willing to lock their money up for years in exchange for potentially higher profits.