SEC Signals Broader Access to Private Credit: Opportunities and Risks for a Wider Population of Investors

On May 19, 2025, newly appointed SEC Chair Paul Atkins signaled a regulatory shift that could expand retail investors’ access to private credit, a space previously reserved for institutional investors and high-net-worth individuals. Atkins announced plans to reconsider existing guidance that restricts how much registered closed-end funds (funds with a fixed number of investors that trade publicly) can invest in private funds, which include funds that issue private credit. If adopted, this change could allow publicly traded closed-end funds to invest significantly in private credit funds, enabling retail investors to gain exposure to these potentially high-performing asset classes while continuing to enjoy liquidity through trading their fund shares on exchanges. On the downside comes the inherent risks of investing in the unregistered private market — risks that are arguably better born by high-net-worth investors and pooled investment funds.