How Family Offices Access Private Debt Deals: A Strategic Guide
Private debt is families' main core investment strategy because it provides higher yield returns (8-12%) than traditional fixed-income assets. Top-tier private debt acquisition demands specialized business networks, detailed investigation, and adherence to regulatory requirements, especially when investing in Singapore.
The guide explains how family offices perform exclusive private debt opportunity evaluation while addressing legal matters and risk exposure.
Why Family Offices Invest in Private Debt
1. Attractive Risk-Adjusted Returns
These Private debt investments generate superior returns than public market fixed-income instruments do. Private debt instruments deliver an increased yield of 8-12% or higher than government bonds which typically offer 3-5% based on risk profile and investment structure.
2. Portfolio Diversification
Private debt provides valuable portfolio diversification. Family offices achieve monetary stability through investments beyond conventional public markets because they minimize the correlation risks to build consistent long-term returns. The link between private debt investments and real assets such as real estate and equipment helps generate extra protection against losses.
3. Inflation Hedge
Private debt can serve as an effective hedge against inflation. Private loans usually rely on SOFR or SIBOR benchmarked floating interest rates that increase when market interest rates increase. Private debt instruments maintain their value through inflationary times while fixed-rate bonds experience value reduction.
4. Control & Customization
Family offices experience better control and higher flexibility when they invest their capital into private debt rather than public market configurations. Depending on their tolerance for risk and return targets investors can work with lenders to establish terms that fit their requirements exactly.
How Family Offices Access Private Debt Deals
1. Leveraging Specialized Networks
Family offices typically access private debt through:
Private credit funds (e.g., Blackstone, Ares Management)
Boutique debt advisors (introducers like Ascendant Global Credit Group)
Peer referrals (other UHNW families, private bankers)
Example: Using an introducer platform a Singaporean family office obtained a 12% return on investment through providing financing to a luxury resort developer.
2. Participating in Club Deals
Multiple investors can unite capital through syndicated loans to access large financing deals that exceed $50 million.
Reduces individual risk exposure.
3. Direct Origination (For Larger Family Offices)
Some ultra-high-net-worth UHNW families who reach near self-originating status provide loans directly through these channels:
Real estate developers
Mid-market businesses
Venture-backed startups
Key Requirement: Strong legal & credit assessment teams.
4. Digital Private Debt Marketplaces
Platforms like Yieldstreet, Fundraise, or ADDX provide vetted opportunities:
· Minimum investments from **20,000∗∗(vs.traditional20,000∗∗(vs.traditional1M+ tickets)
MAS-regulated options available in Singapore
Due Diligence: 5 Critical Checks
Before committing capital, family offices assess:
1. Borrower’s Financial Health
Family offices evaluate financial health by studying audited statements as well as cash flow projections from borrowers before they choose to invest capital. Family offices use debt-to-equity ratios to understand the borrower’s repayment potential.
2. Collateral Quality
Family offices assess whether the loan is properly secured with collateral items such as real estate property equipment and financial receivables. The evaluation stage reveals both the financial dangers and possible recovery amounts when a borrower defaults.
3. Legal Structure
Family offices confirm that loans meet Singapore's MAS regulation requirements for regulated lending as well as legal requirements. The assessment includes verification of Special Purpose Vehicles (SPVs) situated outside the country since these offshore entities influence both tax obligations and risk levels.
4. Exit Strategy
The assessment team develops refinancing solutions during analysis as risk reduction measures for new investments. Loan-to-value (LTV) ratios help assess whether the collateral value matches the provided loan sum.
5. Track Record of Intermediaries
Family offices review the professional backgrounds and reliable outcomes of all intermediaries including fund managers and introducers to confirm their suitability for the investment deal.
Regulatory Considerations in Singapore
1. MAS Licensing Rules
Most private debt deals require no MAS license if structured as private placements.
However, loan aggregation platforms must be regulated.
2. Accredited Investor (AI) Status
Many private debt funds restrict access to AIs ($2M+ net worth).
3. Tax Efficiency
Singapore’s no capital gains tax benefits private debt returns.
Withholding tax (15%) may apply for offshore deals.
Case Study: A Singapore Family Office’s Private Debt Success
Scenario:
A single-family office sought higher-yielding, low-volatility assets.
Through an introducer, they accessed a $10M secured loan to a logistics firm at 11% IRR.
Key Steps:
Deal Sourcing: Introducer connected them to a pre-vetted borrower.
Due Diligence: Verified collateral (warehouse assets) and cash flows.
Legal Structuring: Used a Singapore-based SPV for tax efficiency.
Monitoring: Quarterly financial updates from the borrower.
Result:
Achieved consistent 10%+ annual returns with low default risk.
Conclusion: Getting Started
Private debt offers family offices higher yields, diversification, and inflation protection. However, its success relies on access to exclusive deal flow through introducers, funds, or clubs, conducting thorough due diligence (including financial, collateral, and legal checks), and ensuring compliance with MAS/SEC regulations.
Next Step:
Explore vetted private debt opportunities matched to your family office’s risk profile. Connect with specialist introducers to access institutional-grade deals.