Episode 274: The 3.5 Trillion Investment World Most RIAs Don’t Understand

Higher yields can be attractive, but understanding the risk behind them is what separates smart investing from blind yield chasing. In this episode of the Registered Investment Advisor Podcast, Seth Greene interviews Prath Reddy, CFA, CEO of Percent, who discusses the growth of private credit and why non-bank lending has become an increasingly important part of the financial markets. Prath explains how investors should evaluate credit risk, collateral, liquidity, diversification, and relative value rather than simply chasing the highest available return. He also shares how Percent is working to bring greater transparency and liquidity to private credit, including the launch of PCTX, an electronic trading venue for institutional private credit. Key Takeaways: → Private credit generally refers to privately negotiated loans made by non-bank lenders. → Borrowers may use private credit for greater flexibility, discretion, speed, or because public markets are unavailable to them. → Private credit can offer higher returns in exchange for added complexity, liquidity constraints, and credit risk. → Investors should focus first on the likelihood of getting their principal back rather than simply chasing the highest yield. → Evaluating credit requires understanding repayment ability, collateral, borrower quality, and potential losses in a default. Prath Reddy is Percent's CEO and its first hire, helping shape its direction. He brings years of expertise in financial services, particularly investment banking and capital markets. He also serves as a Board Observer. Connect With Prath: Website: https://percent.com/ Facebook: https://www.facebook.com/investpercent/ Instagram: https://www.instagram.com/investpercent/ LinkedIn: https://www.linkedin.com/company/percent-technologies/ X: https://x.com/investpercent