Private credit the priority for income seekers: three takeaways from our investor survey
Private debt and credit alternatives are growing in prominence as a source of return opportunities and portfolio income. Here we highlight three key underlying themes from our annual Global Investor Insights Survey.
Private debt and credit alternatives have moved decisively from the margins of institutional portfolios into the mainstream. Having captured lending market share in the near two-decade period since the Global Financial Crisis, the compression in risk premiums over recent years, exacerbated by market volatility that has created the opportunity to find and exploit market inefficiencies, has increased investors’ focus on this toolbox of income options.
Schroders’ Global Investor Insights Survey 2025 confirms that these strategies are now recognised by financial professionals (including both institutional investors and wealth gatekeepers) as central to generating portfolio income, and enhacing returns more broadly, in an environment marked by macroeconomic uncertainty and shifting structural demands.
Read the full results of Schroders Global Investor Insights Survey 2025.
Private debt and credit alternatives ranked third overall among asset classes offering the most compelling return opportunities in the current market environment (40%), slightly behind private and public equities. Notably, the asset class ranked first for investors seeking to generate portfolio income over the coming 12 months (44%).
What’s driving this evolution? Our survey results point to three converging forces shaping investor demand for private credit.
1. Insurance and pension investors lead the shift
Institutional investors are at the forefront of this shift toward private credit – and insurance and pension investors are foremost among those prioritising the asset class.
Nearly half (46%) of insurers who responded to the survey on a global basis identified private debt and credit alternatives as their top return opportunity, ahead of both private and public equities. It was also the top ranked option for income generation, with no less than one in two insurance investors (50%) selecting it as their top choice.
This enthusiasm is rooted in structural factors. Changes to capital frameworks over recent years have prompted insurers to explore a broader range of asset classes. Their objectives are clear: to source stable, risk-adjusted yields to match long-term liabilities, while achieving efficient capital charge ratios.
Insurance investors and private credit: Return and income responses
Source: Schroders Global Investor Insights Survey 2025. Respondents were surveyed from April-May 2025. Respondents were asked to select top two return opportunities, and up to three answers for income generation. Chart shows insurance respondents (n = 185) only. For illustrative purposes only and not a recommendation to buy/sell.
Pension schemes – both corporate and public – mirror this sentiment. For pension investors broadly, private debt and credit alternatives sit just behind private and public equities for return potential (41%). Notably, among public pension funds the asset class was almost level with private equity as a source of return opportunities (48% vs 47%), while for corpore pensions it ranked in third place (37%).
On the income front, PDCA comfortably ranks number one for pension plans, selected by 44% of respondents and with the figures broadly consistent across both corporate and public schemes.
Pension investors and private credit: Return and income responses
Source: Schroders Global Investor Insights Survey 2025. Respondents were surveyed from April-May 2025. Respondents were asked to select top two return opportunities, and up to three answers for income generation. Chart shows pensions respondents only. For illustrative purposes only and not a recommendation to buy/sell.
2. North American investors remain the most bullish on credit
From a geographic perspective, North America continues to lead the way in private credit adoption. As the world’s largest and most mature private debt market, with a well-developed and liquid ecosystem for credit alternatives, it’s little surprise that half of North American investors across both institutions and gatekeepers view PDCA as their top return opportunity.
Regional focus: Target asset classes for return opportunities
Source: Schroders Global Investor Insights Survey 2025. Respondents were surveyed from April-May 2025. Respondents were asked to select top two return opportunities. Chart does not show responses from Latin America due to small sample size. For illustrative purposes only and not a recommendation to buy/sell.
When it comes to income, North America again takes the lead. Nearly half (48%) of investors in the region selected private debt and credit alternatives as their preferred income source, well ahead of high-yielding equities (31%). The UK echoes this trend, with 39% of respondents naming private credit as their top income strategy.
In Europe and Asia-Pacific, meanwhile, public equities have regained favour amid a re-evaluation of US exceptionalism and increasing concerns around global market concentration in a small selection of US stocks. Nevertheless, private debt and credit alternatives remains a clear second choice for income, chosen by 43% of responds in Europe and 41% of respondents in Asia-Pacific, respectively.
Regional focus: Target asset classes for income generation
Source: Schroders Global Investor Insights Survey 2025. Respondents were surveyed from April-May 2025. Respondents were asked to select up to three answers. Chart does not show responses from Central and South America due to small sample size. For illustrative purposes only and not a recommendation to buy/sell.
3. Rise of infrastructure debt and securitised credit
Direct lending remains the most prominent strategy within private credit for risk-adjusted income yield, favoured by 69% of all investors targeting the asset class. However, investors are increasingly looking beyond this core allocation to explore wider sources of scalable, thematic income. Two strategies in particular are emerging as leading contenders: infrastructure debt and securitised credit.
Infrastructure debt, selected by 63% of investors who are targeting private debt and credit alternatives to generate income, is gaining traction as a defensive and stable income opportunity. This trend is especially pronounced in Europe, where 72% of investors rank it as their top income strategy within private credit. Corporate pension plans are even more enthusiastic, with 73% choosing infrastructure debt as their preferred income option.
Regional focus: Preferred sources of income within private credit
Source: Schroders Global Investor Insights Survey 2025. Respondents were surveyed from April-May 2025. Respondents were asked to rank their top three responses (% = rank 1+2+3). Question only asked of those who selected PDCA to generate income in the coming 12 months (n = 439). Chart does not show responses from Latin America due to small sample size. For illustrative purposes only and not a recommendation to buy/sell.
Securitised products and asset-backed credit, favoured by 60% of global respondents, also shows strong momentum. Among insurers, gatekeepers and public pension plans, it has become a standout allocation for income – selected by 64% in each of these groups. In North America, securitised credit is now the second-most preferred PDCA strategy, cementing its status as a key tool in the income-generation toolkit.
Institutional investor focus: Preferred sources of income within private credit
Source: Schroders Global Investor Insights Survey 2025. Respondents were surveyed from April-May 2025. Respondents were asked to rank their top three responses (% = rank 1+2+3). Question only asked of those who selected PDCA to generate income in the coming 12 months (n = 439). Chart does not show responses from Official Institutions due to small sample size. For illustrative purposes only and not a recommendation to buy/sell.
Subscribe to our Insights
Visit our preference center, where you can choose which Schroders Insights you would like to receive.
Topics