##  [# The Sleep-Well-at-Night Approach to Private Credit](/sections/conferences/sleep-well-night-approach-private-credit) 

 

# The Sleep-Well-at-Night Approach to Private Credit

 

 

Most advisors either love private credit or want nothing to do with. Find out why Cliffwater’s Phil Huber thinks both reactions are wrong, where direct lending fits in a client portfolio, how to size it, and why structure matters more than most people think.



 

 

 

 

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[By ETF.com Staff](/contributors/etfcom-staff)

 Jul 01, 2026

 Edited by: ETF.com Staff

 

 

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Phil Huber, Managing Director &amp; Head of Portfolio Solutions at Cliffwater, sat down with ETF.com's Dave Nadig at the Basis Northwest conference to talk through where private credit, and direct lending specifically, fits into an advisor's toolkit.

Advisors tend to have an almost binary reaction to the private credit space: either it's a cure-all or it's toxic waste. Huber pushes back on both extremes, making the case that direct lending is simply a third pillar for a diversified portfolio, not a replacement for stocks and bonds. Cliffwater's 20-plus years of index data show that credit losses in direct lending have historically tracked closely with broadly syndicated loans, and that 2022 was actually a moment where direct lending proved its worth, delivering positive returns while both stocks and traditional fixed income fell double digits, thanks to its floating-rate structure.

Many investors tend to think of direct lending as loan-sharking, but Huber clarified that the asset class is really about making loans to profitable, sponsor-backed middle market companies. In other words, businesses with tens to hundreds of millions in annual EBITDA, not startups or mom-and-pop shops. And when it comes to liquidity, the organic liquidity of direct loans (which typically mature in three to four years) meshes naturally with the quarterly redemption structure of interval funds, meaning managers rarely need to force-sell loans to meet redemptions.

It’s an asset class where the interval fund structure is genuinely well-suited, with lower minimums, 1099 tax reporting instead of K-1s, and far less operational complexity than trying to build a diversified portfolio of individual private drawdown funds. Don’t miss the full conversation that includes what to watch for when investing in direct lending and private credit, the role of leverage, and more.

*Discover the news, data, and voices shaping the ETF community. Follow along* [***here***](https://www.etf.com/sections/conferences)*.*



 

 

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