Lauren Ryan, national manager for investments at Thinktank, believes the lessons of institutional investing in credit markets are highly relevant for private wealth clients aiming to build resilient, income-generating portfolios. Drawing from her experience in the debt capital markets and the world of non-bank lending, Ryan outlines how institutions use credit not simply to enhance yield, but to create multi-generational wealth strategies.
At the core of her message is a simple idea. All investors, whether institutions or individuals, are in the business of building wealth. But institutions approach that challenge through a long-term lens, targeting dependable, recurring income rather than short-term capital gains. “Pension funds have to pay retirees for decades. Insurers need reserves for future claims. Retail banks are balancing assets and liabilities. They invest for cash flow, not for hype,” Ryan told The Inside Network’s recent Alternatives Symposium.
Over the past two decades, the structure of lending has changed. Banks, once the dominant force in credit provision, have pulled back due to post-GFC regulation, higher capital requirements and risk aversion. This vacuum has given rise to non-bank lenders, specialist credit providers that operate outside the traditional system, and institutional capital has followed them into the space.
The interest is not coincidental. Ryan notes that institutional investors have allocated billions into non-bank lending strategies, typically via private credit funds or structured debt instruments like asset-backed securities. Their objective is not to take speculative risks but to secure enhanced risk-adjusted returns by targeting credit niches underserved by the banks.
These niches span from invoice finance and equipment leasing to SME mortgages and self-managed super fund lending. Many are backed by real assets or receivables, which offer downside protection. Structured deals often include credit enhancements, allowing investors to choose where they sit in the capital stack. This flexibility lets institutions match investments to specific risk mandates.
Beyond returns, institutional credit investing introduces valuable diversification. Non-bank lending strategies, particularly those accessed via the debt capital markets, offer low correlation to traditional equities and bonds. “Institutions are always searching for assets that perform when markets fall or inflation rises,” Ryan said. “Private debt can be that asset.”
To illustrate, Ryan pointed to a real-world portfolio comprising $7.5 billion in small-ticket residential and commercial mortgages. Built over 19 years, the portfolio is diversified by region, borrower profile, repayment structure and asset type. These are not speculative developments or vacant land but income-producing, existing properties. Such breadth and balance are difficult to replicate outside of institutional markets.
Importantly, the originator of these loans bears the initial credit risk. “In most securitised transactions, the non-bank lender absorbs losses before investors do,” Ryan explained. The layered structure helps protect investors while still allowing them to access the predictable cash flows generated by the underlying loan pool.
That predictability is key. Most structured credit investments pay monthly, quarterly or semi-annual income. With loans typically floating-rate in nature, investors also gain some protection against interest rate risk and inflation. “These are real-world cash flows, not market sentiment-driven returns,” Ryan said. This profile aligns well with the needs of retirees and family offices who want to draw from, not just grow, their capital.
Trust and due diligence are essential to this approach. Institutions spend months assessing non-bank lenders before committing capital. They pore over credit policies, underwriting files, historical performance and management track records. Publicly rated securitisations offer an entry point, while direct warehouse funding or private placements deepen the relationship over time.
Diversification is not just a feature of the loan portfolios, but also of the funding base. Ryan stressed the importance of non-bank lenders having multiple institutional backers, rather than being reliant on a single investor. The presence of a healthy secondary market and engagement with credit ratings agencies adds further layers of transparency and accountability.
Although many of these structured vehicles are not directly accessible to retail investors, Ryan pointed out that credit funds can provide exposure to similar strategies. Some non-bank lenders also offer direct investment opportunities. “It’s not about choosing one or the other,” she said. “It’s about finding the right exposure and structuring it to fit your client’s objectives.”
For advisers, Ryan believes the biggest challenge is education. Many clients remain unfamiliar with private credit or structured debt. Helping them understand how these instruments work, how risk is priced, what collateral is involved, and how income is generated, is critical to building confidence and long-term portfolio resilience.
Ultimately, what institutions have tapped into is a highly effective way of preserving and growing capital across generations. Structured debt investing, particularly through the debt capital markets, delivers stable income, capital preservation and inflation protection. These are not abstract features. They are the foundation for sustainable, purposeful wealth.
Ryan concluded with a challenge for advisers. “By learning from institutions, you can help clients go beyond accumulation. You can help them build portfolios that don’t just ride the market. They shape futures.” For clients thinking beyond their own lifetime, that shift from income to legacy may be the most valuable outcome of all.