Media Source: Wealth Professional | By: David Kitai | Published: October 1, 2025
Execs from Vistara Growth unpack what advisors need to know as they dip their toes in this deeply complex side of the alts market
The rapid growth and widening availability of the private credit market for retail investors and advisors has resulted in a new set of challenges for advisors to overcome. More products with different underlying strategies and approaches in a market segment that is, by definition, less transparent and less liquid than public credit means advisors need to make well informed decisions about a subject they may not be fully familiar with.
While most retail advisors may be relative newcomers to the private credit space, Vistara Growth has been lending to enterprises for over a decade. The Vancouver-based private credit and equity firm specializes in enterprise lending, rather than lending against specific assets or against company cash flow. Randy Garg, the firm’s Founder & Managing Partner, and Noah Shipman, Partner, explained that as advisors start investing in private credit funds, they need to fully grasp these core distinctions.
“Within private credit, there’s a bunch of different sub-sectors where you can get more into asset-backed lending, cash flow lending, enterprise value lending. You know, we play in the latter,” Garg says. “So I think for the retail investors, they just need to understand what they’re really investing in.”
“There’s also the concept of diversification within a particular fund,” Shipman adds. “I think investors will need to navigate the trade off between diversification and the quality of the underlying investments. We believe advisors should be aware of the quality of the underlying investments rather than just how broad a platform is.”
Garg and Shipman spoke largely from their own experience as an enterprise value lender, highlighting some of the challenges that come from assessing the total value of a company and lending against that value. In that space, they tend to lend somewhere between 10 and 30 per cent loan to value, whereas other funds in other subsets of the private credit space might lend at above 50 or even 75 per cent. Enterprise value lending also means taking security over the whole company, as opposed to a specific asset, which can offer more of a cushion to the private credit lender and its investors, in their view.
Shipman highlights the importance of specific expertise in enterprise value lending. His firm, he notes, focuses exclusively on mid to late-stage technology companies in North America. He contrasts that with private credit firms that operate in tech one day, retail the next, and real estate the day after. Understanding the industry that borrower companies operate in allows a private credit firm to make decisions with greater information and confidence. He adds that because his firm is so focused, they function as active board members and participants in the market, rather than relying on diversification to cushion them against underperforming loans.
Garg adds that as advisors look to assess the quality of a private credit fund, they should look at the underwriting processes that funds employ. If that process involves direct engagement with the management teams of a company, as well as other investors, customer reference checks, and industry analysts then those are usually signs of quality. Because private credit lending comes with a great deal of idiosyncratic risk, that level of direct engagement is crucial.
In their own engagement with companies, the Vistara Growth team looks for the company’s potential growth levers and how rapidly they can hit profitability by pulling on those levers. Recurring revenue is another prized metric as no lender wants to see their borrowers lose their sources of revenue at the drop of a hat. The business to business segment, Shipman notes, tends to have more of that sticky revenue. That is particularly the case for software companies that serve the financial and healthcare industries.
Advisors now working with private credit will largely operate in the fund market, rather than engaging in direct lending of their own. As they assess quality in those funds, Garg and Shipman note the importance of the quality metrics outlined above. Moreover, they highlight that there are many forms of diversification in the private credit market, including currency diversification that can help offset certain areas of risk.
Both Garg and Shipman highlight the importance of working with funds that can provide adequate visibility into their own processes and the companies they lend to. The alternatives market is inherently less transparent than public securities, so finding a source of transparency in this space is something they believe advisors should value.
“There are way more data points on a fund that invests in companies. You can track these companies, you can see how they’re doing in market, how they’re growing,” Garg says. “They’re putting out their own information in the public. There are funds who are then willing to share that information on companies and how they’re doing through their own regular reporting, I think that’s another key.”
