We’re adding more managers to our private credit fund
Changes to our private credit fund and the next step in delivering strong, long-term outcomes
We’re excited to share an important update on the continued evolution of the Wealthsimple Private Credit Fund. It’s all part of our commitment to delivering strong long-term outcomes for investors. These upcoming changes require no action from you, and there is no impact on fees or the redemption schedule.
This quarter, we will be adding two new managers to the fund: Cliffwater and Dawson Partners. Each offers its own distinctive strategy and a proven performance history of private credit investing. (We’ll get into that more below.) And each has undergone a rigorous vetting process focusing on credit discipline and historical resilience. They will join our existing manager, Sagard.
When combined thoughtfully like this, multiple managers create a more diversified portfolio that’s better positioned to deliver more consistent performance over time. It also helps us reduce concentration risk, since the fund will no longer be overly reliant upon a single approach.
From the beginning, a multi-manager approach has been central to our long-term vision. We just needed time to grow the fund to a point that it could support multiple managers. Thanks to your trust in us, our private assets platform has grown from $60 million in assets when we launched in 2023 to more than $800 million today, providing the scale we need to take this next step.
In the world of private assets, the importance of having strong managers cannot be overstated. Performance depends heavily on a manager’s skill, their sourcing networks, and their discipline when evaluating and structuring loans. In the past, highly skilled managers like the ones we’ve partnered with were reserved for institutional investors, pension funds, and the ultrawealthy. But we are able to bring them to you.
Here’s a closer look at all three of our partners.
Cliffwater
Their strategy: Cliffwater lends to middle-market businesses backed by private equity sponsors like Blackstone or KKR. It focuses on diversification, capital preservation, and consistent income, often through enhanced lending strategies including music and pharmaceutical royalties.
Why we chose them: Cliffwater is both an alternative asset manager and investment advisor. That combination is what makes them exceptional: the company’s advisory business has direct influence over the investment of $80 billion, which opens a lot of otherwise closed doors when it’s time for Cliffwater to invest its own private asset funds. The company’s Core Fund has outperformed several of the largest and most respected credit funds by more than 1% since 2022, and their Enhanced Strategy Fund has outperformed the Core Fund by 2% over the same period. We’ll be investing in both.
Dawson Partners
Their strategy: Founded by alumni of the CPP and Ontario Teachers’ Pension Plan, Dawson specializes in something called portfolio financing. Instead of lending to companies, Dawson primarily provides liquidity to private equity investors who use their portfolios as collateral.
Why we chose them: Dawson’s strategy is different from traditional private credit investing, making it highly diversifying in our fund. Their approach aims to protect client capital and builds in possible upside that you don’t get in traditional private credit loans (which simply pay lenders a certain amount of interest). Typically, as an underlying portfolio generates income, Dawson receives all of the money coming in until it hits a predetermined minimum, then a portion of any income beyond that. Dawson’s target for this fund — the one we’re investing in — is to generate annual returns of about 10%.[1]
[1] Target returns are provided for illustrative purposes only and are intended to provide additional information with respect to Dawson's investment strategy and risk profile and no assurances can be made that targets will materialize.
Sagard
Sagard has been managing our fund since it launched in 2023, so you are likely already familiar with them. But as a refresher, many of the firm’s private credit partners were responsible for launching the CPP’s private credit arm. Sagard focuses on middle-market companies that are not controlled by traditional private equity owners. That space is less competitive, allowing for higher lending rates and more built-in protections for lenders.
Together, these managers provide diversified exposure across corporate lending, structured and enhanced credit, and private market financing solutions. Looking ahead, we plan to continue expanding the fund’s manager lineup and adding complementary strategies as opportunities arise. This should further strengthen diversification across market cycles — and your returns.
