Nearly 6,000 attendees gathered last month in Huntington Beach, California, for the Future Proof Festival, an event blending music, wellness activities, and financial presentations aimed at promoting private credit and other investment products to individual investors. Over four days, festival participants experienced live performances from artists such as Wiz Khalifa and Gym Class Heroes, participated in meditation and fitness sessions, and attended classes ranging from cocktail making to artisanal cooking, all while engaging with asset management firms pitching private credit offerings.

The event highlighted the growing effort by asset managers to tap into individual investors, a largely untapped market as traditional institutional investors like pension funds and endowments reach their exposure limits in private credit. Firms including Apollo Global Management, State Street, Capital Group, and Franklin Templeton hosted sessions and showcased products designed to integrate private credit into individual portfolios. Many attendees worked within wealth management, serving as intermediaries for retail clients.

Private credit, once a niche sector dominated by institutional players, has expanded into a multitrillion-dollar market focused on financing companies and transactions through lending that previously would have been handled primarily by banks. Individual investors have increasingly been drawn to these funds for their potential high returns, though concerns persist about the associated risks, including illiquidity, high fees, and rising defaults highlighted in the past year.

Despite these risks, asset managers are pressing forward with efforts to attract retail money. Marketing initiatives for private credit and other private investments have become more visible, appearing at upscale venues, sporting events, and industry conferences. Some firms are actively lobbying for regulatory changes to allow broader access to private assets within retirement plans like 401(k)s.

However, the push to democratize private credit has provoked debate. Proponents argue that opening access to private funds offers individual investors profit opportunities similar to those long enjoyed by institutions. Critics caution that retail investors may be less equipped to manage the sector’s risks, including significant loan write-downs, fraud potential, and vulnerabilities linked to shifting technology trends, such as the impact of artificial intelligence on portfolio companies.

Blue Owl has emerged as a focal point of concern after aggressively marketing to individuals and facing apprehension over its exposure to tech companies potentially threatened by AI developments. Earlier this year, Blue Owl sold off $4.1 billion in loan assets amid worries about liquidity, prompting some investors to withdraw substantial sums—reportedly over $10 billion from two funds. The company responded by affirming the strength of its software segment and asserting that liquidity remains stable. Its flagship fund reported that more than 90% of its approximately 90,000 shareholders remained fully invested as of early October.

Data from investment bank Robert A. Stanger indicates private credit funds marketed to individual investors saw roughly $30 billion in withdrawals in the first nine months of 2026, even as inflows slowed. Other fund managers report a decline in demand for private credit from retail investors but note increased interest in private equity and real estate vehicles.

Wealth management firms continue to be heavily courted by private credit providers. Frank Fantozzi, CEO of Return on Life Wealth Partners, which manages $475 million in individual assets, noted that fund managers from major firms such as Apollo, Blackstone, Blue Owl, and KKR routinely seek meetings to pitch their products. While Fantozzi acknowledges private investments can be suitable for some clients who meet financial criteria—with typical private credit allocations ranging around 5% of portfolios—he has also grown cautious. His firm ceased new investments into Blue Owl’s Credit Income Corp fund due to concerns about its tech exposure, particularly related to AI risks.

Traditionally, private capital sectors like private equity and credit have relied on large institutional investors with long investment horizons. The private credit segment grew substantially after the 2008 financial crisis, when tightened bank lending created opportunities for firms like Apollo, Blackstone, and KKR to expand lending activities financing leveraged buyouts and other deals. As institutional appetite reached capacity, these firms turned toward high-net-worth individuals and family offices to sustain growth.

Many private credit investments are offered through business development companies (BDCs), which pool investor funds to extend loans to companies that often struggle to secure traditional bank financing. BDCs typically offer higher yields but come with restrictions such as limited liquidity—often capping redemptions to about 5% of fund value per quarter—and higher fees compared to public-market investments.

Some financial advisers are hesitant about recommending private credit to retail clients. Melissa Joy, an investment adviser from Michigan, pointed out that retail investors often face less favorable fee structures relative to institutions and lack access to in-house expertise that closely monitors these investments. Likewise, Derek Notman, a Florida-based adviser attending the Future Proof event, said most clients prefer simpler, lower-risk public investments, with few expressing strong interest in private vehicles.

As private credit firms continue efforts to broaden access for individual investors, the sector faces the challenge of balancing growth ambitions with investors’ appetite for risk and regulatory scrutiny over expanding availability into the retail market.