As interest rates on investment grade bonds have fallen to near-zero, private credit has attracted increased interest from institutional investors. Callan expects that private credit will offer substantially higher yields and equity-like total returns while in some cases providing regular cash distributions. In exchange, investors must accept illiquidity, with individual loans having an average life of three to five years and fund terms typically ranging from five to ten years. Additionally, private credit potentially incurs higher credit risk as borrowers are often smaller than those able to access traditional credit markets.