Why Consistency Beats High Returns in Private Credit Investing
When investors chase double-digit yields, things can spiral fast. Private credit often dangles promises of lofty returns – but without structure, that can spell trouble. After the market swings of 2022–2024, the smarter move isn’t chasing the highest returns. It’s demanding consistency.
LBC Capital Income Fund, LLC built our fund on that principle. Here’s why a focus on predictable, stable income beats the occasional high-wire act of yield-chasing.
1. Market History: High Yields Don’t Always Mean High Rewards
Private markets often tout 12–14% return strategies, but few deliver without hidden risks. According to Morningstar and KKR, private credit tends to offer steady 8–10% annualized returns, not jackpot numbers
Even leveraged loan funds show stable performance but don’t scale toward the flashy yield targets once marketed.
2. Why Consistency Matters
- Predictable cash flow allows for monthly budgeting, retirement planning, or reinvestment.
- Lower volatility keeps portfolios balanced; private debt’s correlations with equities and bonds are weak.
- Reduced capital loss risk—defaults in private debt hover around 1–2%, compared to public high-yield bonds.
Put simply, sustainable returns outweigh occasional windfalls.
3. The Cost of Chasing Alpha
High-yield gurus often:
- Use leverage (debt on top of debt), amplifying risk
- Target distressed or subprime deals, where default risk spikes
- Employ covenant-lite structures, reducing borrower accountability
Yep, yields run hot in these cases—but defaults can wipe out gains quickly.
4. How LBC Capital Income Fund, LLC Delivers Predictable Yield
Our model focuses on:
- Short-term, floating-rate loans—interest resets protect against rate moves.
- Conservative underwriting—evaluating borrowers and deals with discipline.
- Monthly distributions built into fund mechanics.
- Low default outcomes—we’ve seen no principal loss over a decade-plus track record.
That’s the engine behind our reliable 8–8.5% net yield.
5. What This Strategy Means for Your Portfolio
- Retirees benefit from steady distributions without volatility risk.
- High-net-worth investors keep capital safe during economic swings.
- Financial advisors gain a stable income alternative clients actually understand.
LBC Capital Income Fund, LLC’s approach aligns with dedicated portfolio strategies: yield with time horizon control and down-market protection.
6. Analytical View: Yield Stability Over Time
| Metric | LBC Capital Income Fund, LLC | High-Yield Private Credit |
|---|---|---|
| Average Annual Return | 8–8.5% net | 10–14% gross (volatile) |
| Standard Deviation | Low | High |
| Default Risk | <2% | 3–5%+ |
| Correlation (S&P 500) | Near zero | Moderate to high |
| Liquidity | Monthly redemptions possible | Often locked multi-years |
For investors, the maths adds up: smoother returns with less surprise.
Final Take
High yields are sexy – but not always safe.
The better bet? Consistent, dependable returns that help you sleep at night.
That’s what private debt delivers—when structured thoughtfully.
At LBC Capital Income Fund, LLC, we don’t chase yield—we build it. With risk control, disciplined underwriting, and transparent distributions, our fund proves stability beats adrenaline every time.
If you’re ready to stop chasing upside and start banking real income, let’s talk.
Latest posts
Blog page
Why Loan-to-Value (LTV) Matters More Than Interest Rate in Private Lending
If you spend enough time around private lenders or accredited investors who consistently earn predictable returns, you’ll notice something interesting: very few of them obsess over the interest rate first. Instead, they start with a number that rarely makes headlines but has an outsized impact on risk—Loan-to-Value, or LTV. In private lending, interest rate is […]
How Multi-Asset Strategies Use Private Credit to Improve Yield Stability
Most accredited investors eventually reach a point where traditional diversification stops feeling sufficient. You can mix stocks, bonds, real estate, treasuries, alternatives—yet your portfolio still rises and falls with the same waves of sentiment, interest rates, and economic cycles. That’s where private credit has quietly become one of the most important building blocks inside a […]