Exploring Private Credit Through the Lens of a Fund Administrator: Q&A with Suntera’s Michael Von Bevern
Private credit has emerged as a powerful alternative to traditional bank loans and public debt markets. As this asset class grows, so does the importance of fund administrators, who serve as the operational backbone of private credit funds. Historically, fund administrators were seen as back-office support, focused on routine operational tasks. However, in the private credit space, they are increasingly viewed as strategic partners.
Fund administrators are critical to the smooth functioning of private credit funds, managing a wide range of responsibilities including fund accounting, investor services, loan administration, compliance and regulatory support, and technology and data management.
Michael Von Bevern, Co-Managing Director for the Americas at Suntera Fund Services, discussed with Connect the reasons behind the rapid growth of the private credit market in recent years, the advantages that technology and automation bring to private credit firms, and his outlook for the rest of 2025.
CM: The private credit market has seen rapid growth over the last few years, can you explain it?
MB: Private credit is still a growing market and could double in the next few years. At the beginning of 2024, the private credit market was worth about $1.5 trillion and is expected to grow to $2.8 trillion by 2028, underscoring its increasing importance as a funding source in the financial ecosystem.
Private credit is an industry that wants to fund the future, not see you default on a loan. I see it very much in the same way you see private equity. It has an upside that is equally as big for investors. Private credit is not a bubble but more of an umbrella that encompasses a wide range of credit types like asset-based loans, residential loans, and corporate loans. But it is also nuanced. Every day feels like a new day when working with private credit funds in the fund administration business. You deal with technology and all the moving parts that come with private credit.
CM: Where do you see private credit default rates? What can we anticipate with them moving forward?
MB: In Q3 2024, private credit defaults were significantly lower than in Q2 2024, signaling improved borrower stability. While the final figures for Q4 2024 are not yet available, we expect default rates to continue to decrease at a gradual pace, reflecting positive momentum in the market.
Lower default rates are a benefit for private credit borrowers as they signal stronger financial health and reduced repayment risk. Over time, lower rates provide relief to borrowers by improving loan affordability, ultimately reducing the likelihood of default.
CM: What do you expect from the Trump administration when it comes to regulation affecting private credit?
MB: We expect the Trump administration to propose tax cuts and focus on deregulation as a whole. Whether private credit will directly be impacted by deregulation remains to be seen. However, as an administrator, we must pay close attention to how regulation and tax changes could affect the private credit market. For example, fewer disclosures could lead to lower compliance costs. Tax changes could mean more opportunities and investment avenues. Additionally, enhanced risk management strategies could be required, especially if there is an increase in retail investor participation in private credit.
CM: Fund administrators are increasingly embracing technology. As a fund administrator for private credit funds, can you explain how technology helps mitigate risk for a fund?
MB: Technology can help mitigate risk for a private credit fund in a couple of ways. First, providing predictive analytics to help identify potential risks allows fund managers to address issues proactively. Second, technology provides transparency. In today’s private credit landscape, transparency is no longer a luxury; it’s an expectation. Limited partners (LPs) now require more frequent, detailed and timely insights into their investments, often requiring third-party valuations to validate asset performance. At the same time, evolving regulatory frameworks impose stricter reporting obligations, making it increasingly complex for fund managers to keep pace across regions.
CM: What about automation? How does it benefit private credit firms?
MB: For private credit firms, fully automated solutions and technology can streamline operations and enable firms to conduct business more efficiently. For example, by automating the loan administration process, fund managers can shift their focus to higher-value activities like strategic investment decisions and portfolio optimization. Automation also enhances efficiency because automated workflows minimize manual data entry, reconciliation, and reporting, minimizing the risk of errors while creating administrative efficiencies.
CM: What is your outlook for the private credit market in 2025?
MB: In 2025, we expect to see more evolution in the private credit fund administration space. Many private credit fund administrators have separated their services into loan administration, loan agency, trade settlement, and fund administration. This structure works well for private credit syndicated bank loans because many lenders are involved, requiring organization. Private credit fund managers are increasingly looking to fund administrators to perform all the necessary job duties under one team.
