Diversify with private credit and equity real estate investment funds that make non-concessionary impact investments to expand access for America’s working families to affordable, safe communities.
Senior Secured Mortgage Fund that makes private credit investments to experienced real estate sponsors. Targets monthly passive income and annual returns of up to 10% for accredited investors.
Private Real Estate Investment Fund that invests in income-producing, attainable rental communities. Targets monthly passive income and annual returns of up to 12% for accredited investors.
Private Preferred Credit Fund that makes primarily equity (debt for tax purposes) and debt investments to preserve attainable rental housing. Targets monthly passive income and annual returns of up to 11% for accredited investors.
Private Real Estate Investment Fund that invests in all stages of development to build, improve, and manage attainable rental housing. Targets quarterly passive income and annual returns of up to 13% for accredited investors.
See how DLP Capital’s lending fuels real estate projects that transform communities. These stories highlight the creativity, determination, and results of the talented sponsors we work with.
Explore a selection of our recent transactions across lending, acquisitions, and investments — demonstrating our commitment to delivering momentum, certainty, and impact for real estate projects nationwide.
Our core value of Driven for Greatness is about adopting a growth mindset and consistently seeking out opportunities to learn. The Twenty is our way of helping you do just that, named after the core value that sets the tone for all we do: the Twenty-Mile March. Learn from our latest webinars, articles, podcast episodes, and more.
In his blog, Founder and CEO Don Wenner shares insights from the lessons he’s learned as a faith-driven CEO who has grown DLP Capital to be an Inc. 5000 Fastest-Growing Company for 13 consecutive years at just 40 years old. Learn not just from his own experiences as an entrepreneur, father, and husband, but the most important lessons he has learned from friends and mentors like John C. Maxwell, Lloyd Reeb and others.
From impact investing to building an extraordinary organization while being equally focused on an extraordinary family, Don Wenner’s Elite Impact Podcast covers it all. Learn valuable insights and hear incredible stories of leadership, impact, and more from Don and his guests.
Experience DLP Capital events anytime. Watch keynotes, panel discussions, and training sessions featuring industry leaders and experts driving innovation and impact.
Access DLP Capital’s complete webinar library, featuring quarterly fund updates, educational sessions, and special presentations designed to keep investors informed and inspired.
Read the latest DLP Capital quarterly report for the most recent performance of DLP Capital-sponsored funds, updates on current investments within the funds, stories of our impact in action, company insights, and more.
CEO Don Wenner has built a life—and a company—dedicated to transforming lives through access to safe and attainable housing. Today, DLP Capital is creating solutions to the affordable housing crisis, redefining community, and helping investors discover success with significance.
DLP Capital’s purpose-driven, non-concessionary impact investments create housing, jobs, connection, and opportunity for families across America. Discover more about how DLP invests with purpose.
Meet the visionary leaders committed to executing DLP’s vision of transforming the lives of both residents and investors through the building of Thriving Communities.
Stay inspired by the latest updates from DLP Capital. Explore how we’re driving meaningful change, earning recognition, and celebrating milestones as we continue building thriving communities across America.
At DLP Capital, work is more than a job—it’s a mission. Join a team dedicated to solving America’s housing crisis, building thriving communities, and creating opportunities for families across the country.
Our mission starts with connection. Reach out to our team or visit one of our locations to learn more about how DLP Capital is creating impact where it matters most.
Debt funds can help accredited investors build resilient, diversified portfolios. Here’s how they work.
November 4, 2025
Investment Insights
The once-niche private credit asset class has grown rapidly in the 21st century.
According to the Federal Reserve Bank of Boston, the private credit market “grew in real [inflation-adjusted] terms from $46 billion in 2000 to roughly $1 trillion in 2023,” or nearly $2 trillion in nominal terms.1
Much of the growth of the private credit market after 2019 can be attributed to the proliferation of direct lending. Unlike traditional bonds or equities, private debt funds extend capital directly to borrowers, often secured by real estate or other tangible assets. The debt fund structure creates opportunities for investors to capture potentially higher yields while maintaining downside protection.
In this article, we take a closer look at what a debt fund is, how it works, and how accredited investors can benefit from allocating to one.
What is a debt fund?
A professionally-managed debt (or credit) fund pools investor capital from accredited investors into a portfolio of loans that the fund directly negotiates with, and extends to, middle-market borrowers.
Unlike publicly traded bonds, loans made by private credit debt funds are less liquid and do not trade on an exchange. This has the potential to result in less exposure to volatility, more income potential, and higher yields—a concept known as the liquidity premium.2
Why accredited investors choose debt funds
Private debt funds can potentially offer unique benefits that resonate with accredited investors looking for both performance and protection.
Built-in risk management for income-focused investors
Debt funds like the DLP Lending Fund specialize in senior secured lending. These loans are backed by first-position mortgages and reinforced with personal guarantees. If a borrower defaults, investors are the first to be repaid, ahead of equity holders and unsecured creditors.
The DLP Preferred Credit Fund takes a different approach, investing in subordinate and mezzanine loans or preferred equity in real estate-backed projects. This structure positions the fund ahead of sponsors’ equity, which can help protect investors while supporting development, improvement, and preservation of attainable rental housing projects.
This protection is strengthened through rigorous underwriting. Before extending financing, a debt fund’s investment team may conduct stricter due diligence on borrowers or require personal guarantees, promises made by the borrowing company’s principals to make the lender whole using personal assets in the event the company’s assets cannot cover the amount owed. This can potentially insulate debt funds from default risk and improve recovery rates even if borrowers do not repay their loans.3
Investors prioritizing predictable cash flow look for offerings with the potential for ancillary income. Debt funds earn more than just interest; they can generate ancillary income through origination fees, extension fees, prepayment fees, and exit fees.
Historical resilience for performance-focused investors
According to Federal Reserve research, direct lending has historically outperformed high-yield bonds during periods of rising rates, while performing comparably during periods of easing. Private debt funds have enjoyed similar historical outperformance when compared to publicly traded leveraged loans, proving their stability in changing market conditions.4
Sources: Bloomberg. Pitchbook LCD.
Debt fund returns are largely uncorrelated with public debt or equity markets. For investors, adding a large number of uncorrelated assets can help diversify their portfolios, potentially resulting in lower volatility and more sustainable long-term returns.4
Proactive investors are positioning for interest rate cuts
As investors anticipate a shift toward rate cuts, many are asking how that might affect returns from debt funds.
For private real estate investment funds like the DLP Lending Fund, a moderation in rates can lower borrowing costs for sponsors seeking construction or permanent financing, expanding the pool of potential projects. While loan coupons may drift down modestly, the reduced cost of leverage and stronger borrower demand can help maintain attractive spreads for investors.
Lower rates can decrease overall project costs, improve sponsor cash flows, and reduce default risk—factors that ultimately strengthen the fund’s protective positioning. Because funds like the DLP Preferred Credit Fund often sit in a preferred equity or mezzanine tranche, improved project economics enhance both safety and return potential. Lower rates also tend to compress construction costs and land prices, supporting transaction volume. This opens up more opportunities, helping to balance downward movement in loan yields.
Access debt fund opportunities through DLP Capital
As private credit continues to grow and evolve, debt funds offer accredited investors a compelling opportunity to capture income, mitigate risk, and diversify their portfolios. DLP Capital-sponsored debt funds provide access to potential returns that are difficult to replicate in public markets.
Accredited investors seeking targeted net annual returns of up to 11% should explore how the DLP Lending Fund and the DLP Preferred Credit Fund can play a strategic role in your investment portfolio.
FAQs
What is a debt fund, and how does it work?
A debt fund (also known as a credit fund) is an investment vehicle that pools money from accredited investors that is then aggregated and invested into fixed-income credit instruments, like real estate-backed mortgages, corporate bonds, or government debt.
How does a debt fund make money?
A debt fund has the potential to make money primarily through interest income generated by the fund’s debt offerings. Some funds may also earn additional income from origination or underwriting fees, which may be paid upfront or throughout the life of the loan by the borrower.
Why choose private real estate debt over equity investing?
Debt investors can earn consistent income and are first in line for repayment, which can create a more predictable risk-return profile.
Which debt fund gives the highest return?
According to research from the Federal Reserve, debt funds that engage in direct lending have, as a cohort, historically generated higher returns than leveraged lending or public debt funds.5
Can I withdraw money from a debt fund?
Yes. You can withdraw money from a publicly traded debt fund by simply selling your ETF or mutual fund shares. If you’re invested in a private debt fund, you can redeem your investment, either in whole or in part, by providing notice to your fund manager, depending on the structure of the individual fund.
Unlike many private funds that lock up capital for years, DLP Capital’s credit funds offer quarterly liquidity with just 90 days’ notice—giving investors meaningful access to their capital without sacrificing the benefits of private debt investing.
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