Investors from family offices to pension funds are seeking alternatives, while companies are looking for fresh financing. Against this backdrop, demand for private debt is rising. Compartments can lower the barrier to entry. “An increasing number of institutional investors are using this vehicle to access private debt in a simple, legally robust and flexible way”, says Daniel Knoblach, Board Member at Super Global Services SA.
While market chatter turns to a potential year-end rally in equities, many institutions are focusing on a different asset class: private debt. “Private debt is benefiting as two trends coincide”, Knoblach notes. Corporates have substantial funding needs and investors such as pension funds, insurers and family offices are actively searching for alternative sources of return. ‘With equity markets having performed well so far in 2025, many are reassessing how best to position for the remainder of the year.”
For investors, private debt presents both opportunities and hurdles. The asset class typically exhibits a low correlation with equities and government bonds and has historically generated returns exceeding those of global equity markets in many phases. It can be a major contributor to diversification and income. Access, however, can be challenging. High minimum tickets from around one million US dollars and complex fund structures often exclude smaller institutional investors. “Despite its potential, private debt remains difficult to access for many”, says Knoblach.
Free & non-binding
Luxembourg-law compartments offer a practical solution. They can serve as a dedicated wrapper for private-debt exposures, making the asset class investable for institutional investors. “A compartment is transparent and, by virtue of its legal structure, secure to handle for institutions”, Knoblach points out. It can also be held in a securities account, allowing it to be administered like other portfolio positions.
Compartments are highly flexible and can accommodate individual mandates across the private-debt spectrum, from traditional credit funds to collateralised loan obligations (CLOs), which pool portfolios of corporate loans. “The Luxembourg framework materially simplifies administration and reporting for investors”, Knoblach adds. A specialised service provider manages structuring and ongoing operations, enabling investors to focus on strategic allocation. This opens the door for smaller institutions to access an asset class that has often been the preserve of larger players.