(Bloomberg) — Big traditional money managers are finding that it’s taking time to capitalize on the frenzy to start private credit funds for retail investors.
“It’s a very competitive market for private credit in the wealth channel,” T. Rowe Price Group Inc. Group Chief Executive Officer Rob Sharps told analysts Thursday on a fourth-quarter earnings call, adding that the credit market has “made it difficult to differentiate on performance.”
T. Rowe is in the “early stages” of bringing a private credit fund, dubbed OCREDIT, that it started in October to wealth management clients, Sharps said. T. Rowe is among a roster of large money managers seeking to compete in the rapidly growing market for private credit and alternative assets.
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T. Rowe, which had $1.4 trillion of client assets at the end of December and has historically offered actively managed stock and bond funds, acquired Oak Hill Advisors in 2021 to expand into alternative assets. The private credit fund started with $1.5 billion, including $600 million in equity from T. Rowe and institutional investors.
Sharps said the fund raised $100 million since the end of September, and the company anticipates pulling in a similar amount in the first quarter. It seeks to expand to additional advisers and brokerage platforms throughout the year.
T. Rowe has been hit by a period of net outflows of cash, with clients pulling $28 billion in the fourth quarter and $82 billion in 2023, the company said in an earnings statement. Sharps said he expects better investment performance to help improve flows this year.
Shares rose 0.3% to $110 at 10:39 a.m. in New York trading.