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Private Credit
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Access to structured products
Hurst selects credit transactions based on actual returns and rigorous risk analysis, prioritizing risk management and predictable returns.
Higher returns than traditional fixed-income investments
Private credit offers more attractive returns than government bonds, with risk-adjusted returns and more tailored opportunities.
Portfolio diversification with risk management
Including private credit in a portfolio helps balance exposure across different asset classes, offering moderate risk and good potential for returns.
Low volatility
Because it does not depend on daily market prices, private credit tends to be more stable, making it ideal for long-term strategies.
What is a personal loan?
Private credit is a form of investment in which investors lend money to private-sector companies by purchasing debt securities, such as debentures, CRs (Receivables Certificates), and CCBs (Bank Credit Notes). In return, they receive interest payments and, at maturity, the principal amount invested.
These securities are issued by companies seeking to finance their operations, expand projects, or even contribute to the business’s working capital. Although financing and contributing to working capital may seem similar, they are legally distinct transactions—and, in many cases, the investor is directly contributing to this capital, which is essential to the company’s operations.
This type of investment has gained prominence due to its combination of superior returns and controlled risk, especially when selected by specialized firms such as Hurst. This is because investing in private credit allows investors to diversify their portfolios with assets that offer predictable cash flow and lower volatility compared to equities, making it an attractive option both for those seeking stability and for those looking for returns above the average offered by traditional fixed-income investments.
How does it work?
Investing in private credit involves allocating capital to debt securities issued by private-sector companies, with the aim of achieving higher returns than those offered by traditional fixed-income investments, while maintaining a good level of predictability and risk control. This type of investment may include debentures, CRs, and other structured instruments that offer periodic interest payments and the return of the principal at maturity. The functioning of private credit can be understood based on two central pillars:
Value proposition
This reflects the strategic rationale behind investing in private credit. By financing and supporting working capital through well-structured securities, investors seek to achieve more attractive returns with lower volatility. Furthermore, the decision to focus on transactions with tangible results, high-quality issuers, and fixed maturities enhances the potential for steady income generation and reinforces the investment’s conservative profile.
Technological infrastructure
This refers to the process of selecting, analyzing, and monitoring transactions. Hurst identifies reliable issuers, negotiates favorable terms, and structures contracts that offer the potential for robust returns and investor protection clauses. This framework includes credit analysis, payment flow management, and legal and financial oversight of transactions, providing investors with greater risk control and transparency.
The main advantages of investing in private credit:
Higher returns than traditional fixed-income investments
Private debt securities typically offer higher interest rates than government bonds, thereby increasing the portfolio's potential return.
Cash flow predictability
Private credit involves fixed schedules for interest payments and principal repayments, which makes it easier for investors to plan their finances.
Access to productive sectors of the economy
By investing in private credit, you help boost the working capital of real companies, which create jobs and drive growth in strategic sectors such as infrastructure.
Low volatility
Private debt securities experience less price volatility in the short term, making them ideal for more conservative investors or strategies focused on stability.
Risks of investing in private credit
Concentration risk
Investing in just a few issuers or sectors reduces diversification and increases the impact of any specific problem on the portfolio.
Liquidity risk
Private debt securities may see limited trading on the secondary market, making it difficult to sell them before maturity at fair prices.
Pricing risk
Since many credit assets are not traded on an exchange, their mark-to-market valuation may be less transparent, making it difficult to track their actual value.
Mitigation: To reduce this risk, Hurst relies on a team of experts who conduct rigorous analyses of assets, ensuring a thorough and well-founded assessment. In addition, the legal department provides a highly qualified and analytical perspective on the structure of the transactions.
Structuring risk
Poorly structured securities, with weak clauses or limited contractual protection, increase investors’ vulnerability in adverse situations.
Mitigating Factor: Hurst also takes a strategic approach to mitigating this risk, with experts experienced in contract analysis and legal structuring, ensuring greater stability and protection for investors.
Learn more about investing in private credit
Brazil has a robust market that most people aren’t aware of—and investing in private credit is the key to accessing opportunities with high returns and controlled risk. Want to understand how it works and why this type of investment is gaining ground in the most strategic portfolios? In the video below, we explain everything in a simple, straightforward, and practical way.
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