Invest in tech leaders before they go public

Unlike traditional bond funds, private credit gives you access to privately negotiated loans that are not traded in public markets. These loans often offer higher yields and risk management due to their collateral and position in the capital structure, such as with senior secured private credit (highest seniority). However, they also typically come with restricted liquidity and lock-up periods compared to public market instruments.

- Higher yield potential: Because private loans are less liquid and use tailor-made contracts, they often pay a premium.

- Risk management through seniority structure: Private credit includes loans that are provided to companies at varying risk levels and therefore provide varying return profiles as well. This is called a seniority structure. Senior secured private loans sit at the top of the capital structure for priority repayment, offering a layer of protection in the rare event of a default.  

- Low correlation to public markets: Private credit typically has a low correlation to public markets, which helps diversify your portfolio and reduces overall volatility. Unlike public bonds, private credit instruments are not traded on exchanges and are therefore not marked-to-market daily — this results in more stable returns that are less affected by short-term market swings.

- Restricted liquidity: Unlike public bond funds, private credit products have traditionally come with multi-year lock-ups ranging from 3-10 years. 

Private Credit is a USD-denominated income-generating portfolio only available to Reserve clients (Accredited Investors).

Private credit involves the provision of debt capital by non-bank entities, including private equity funds, hedge funds, and direct lending platforms, to businesses seeking financing. Unlike public credit markets, private credit transactions are not traded on public exchanges, and terms are negotiated directly between lenders and borrowers. This alternative form of lending typically targets companies with limited access to traditional bank loans, offering more flexible terms, higher interest rates, and customised structures that may include mezzanine financing, senior secured debt, or other non-traditional debt instruments.

Unicorn Top 20 is a private markets strategy designed to provide exposure to a portfolio of late-stage, pre-IPO unicorn companies. 

The strategy seeks to reflect the holdings of the Morningstar PitchBook Unicorn 20 Index, which tracks a basket of leading private companies globally.

A unicorn is a privately held company valued at over $1 billion USD. 

These companies are often high-growth businesses that have scaled rapidly, are backed by institutional investors (like venture capital and private equity firms), and are not listed on public stock exchanges. 

Private unicorn investments differ from listed stocks in several ways:

• Limited liquidity: Shares are not freely traded on public exchanges.
• Valuation methodology: Prices are typically based on private transactions rather than continuous exchange pricing.
• Longer time horizons: Unlike public stocks that can be bought or sold daily, private companies often require investors to wait for a liquidity event, such as an IPO or company sale, before fully realising value. 
• Risk of loss: Private companies carry significant business and valuation risks. Investors may lose part or all of their investment.

Because of these characteristics, unicorn investing is generally suited for investors with a higher risk tolerance and a long-term investment horizon. 

The Morningstar PitchBook Unicorn 20 Index is a rules-based index designed to track 20 leading private unicorn companies. The index methodology includes:

• Selection based on size and liquidity criteria
• Equal weighting across all 20 companies, so no single company dominates the index
• Quarterly rebalancing, based on the index’s published methodology
• Focus on global unicorns with liquid secondary markets, allowing for observable pricing data

Because it follows a defined methodology, company selection and weighting are determined by the index’s rules rather than discretionary manager decisions.

1. Speak to a Wealth Advisor 

Click here to schedule a call and learn more about how unicorn investing can complement your portfolio.

2. Verify your Accredited Investor (AI) status

If you’re not yet verified as an AI, you will need to submit your AI verification documents via the StashAway app or web dashboard. Click here to get verified today. 

No, while Unicorn Top 20 does not come with multi-year lock-ups, there is still a lock-up period, after which you will be able to make redemption requests, subject to meeting the underlying fund’s redemption terms. In addition, redemption requests may be subject to fund-level limits (also known as gating provisions). These limits restrict the total amount that can be redeemed within certain rolling periods, and in some circumstances, redemptions may be deferred. 

That’s why Unicorn Top 20 is generally suited for investors with a longer investment horizon and a lower need for immediate access to funds.