About How it works Performance For advisors

Up to 12% annual yield

Targeting steady annualized yield of 7% to 12% after fees

Historical Total Returns

Historical total returns are the combined performance of yield distributions and fund NAV value. Returns are the average of all funds, before Heron’s 1% management fee, available in the Personalized Private Credit portfolio (as of September 30, 2024).

Last Year (2023)

15.2%

Trailing Twelve Months

12.2%

Projected performance of a $100,000 investment

The projected returns shown use the total return from “Last Year (2023)” aggregated from all funds available on the Heron platform. Past performance does not guarantee future returns.

Key Performance Metrics

Dividend Yield

10.7%

Non-Accrual Rate

0.67%

Loan Valuation

100.4%

Fund Leverage

0.7

% Payment in Kind (PIK)

3.2%

% First Lien Loans

95.2%

Funds included: Ares Strategic Income Fund (ASIF), Apollo Debt Solutions BDC (ADS), Golub Capital Private Credit Fund (GCRED), and Stellus Private Credit BDC (SPCBDC)

Personalized Portfolio Sample

Through our fundamental research and advanced technical analysis, we provide diverse exposure to returns from thousands of senior secured loans for consistent income. Below is a sample Personalized Private Credit portfolio based on a moderate risk preference.

Total Loans

1274

Target Yield Net of Fees

8.5% - 10%

Senior Secured Loans (% of Total)

98%

Information Technology

22%

Industrials

20%

Consumer Discretionary

17%

Health Care

16%

Financials

12%

Other

13%

Senior Secured First Lien

98%

Structured

Senior Secured Second Lien

Subordinated

<1%

Ares Strategic Income Fund

31%

Apollo Debt Solutions BDC

30%

Golub Capital Private Credit Fund

27%

Stellus Private Credit BDC

12%

Invest with confidence

<1%

Low Loss Rate

The loans that Heron portfolios have exposure to are from credit funds we carefully select based on their track record. They all have less than a 1% annualized loss rate, and years of experience structuring and managing loans.

SEC Registered

Heron Finance is an SEC-registered investment advisor (RIA), managing money and providing investment advice to U.S. accredited investors.

$100B+

Leading Credit Funds

Heron Finance provides exposure to established funds that manage more than $100 billion in private credit investments. These funds are often only accessible to institutions, but Heron provides access to all accredited investors.

Backed by the best

Your questions, answered

1% annual management fee.

Simple flat rate, no performance fee.

7-12% yield after fees.

Choose your target yield based on your risk tolerance.

$5,000 minimum investment.

Easy to get started with a small investment.

No lockups. Request redemption at any time.

We aim to fulfill requests within one quarter.

What is Heron Finance?

Heron Finance is a digital platform that offers U.S. accredited investors exposure to private credit, which has long been an attractive asset class for institutions and high net-worth individuals (“HNWI”). Heron Finance is expanding access to private credit by building Personalized Private Credit portfolios based on the individual risk profiles and investing objectives of accredited investors.

What are the risks of private credit?

Investing in private loans on Heron, also called “private credit”, provides a more predictable income stream compared to stocks, which can be highly volatile and do not guarantee dividends. This yield is also particularly attractive in a low-interest-rate environment, where traditional bonds may not offer sufficient returns to meet investors’ income goals.

By including Heron Finance in your portfolio, you can achieve a more balanced risk-return profile, with the potential for steadier income and lower overall volatility compared to a portfolio solely composed of stocks and bonds.

While private credit returns are historically higher than traditional fixed-income investments like bonds, and more stable than stocks, they do come with some unique risks, including:

Lack of liquidity
Hard to value assets
Lack of transparency
Deal-structuring complexity
Servicing risks
Sector and concentration risk
Relatively short history

To help mitigate these risks, we implement a comprehensive strategy when creating portfolios for our clients. Read our article to learn more about each risk and our approach to risk mitigation.

What are the recommended allocations for alternative assets?

Private credit is considered an alternative asset class, along with real estate investments, private equity, hedge funds, commodities like gold and silver, infrastructure, collectibles, and digital assets.

The recommended allocation to alternative assets in a financial portfolio can vary depending on your goals, risk tolerance, investment horizon, and overall financial situation.

Factors to Consider:

Risk Tolerance: Investors with a higher risk tolerance may allocate more to alternative assets, while those with lower risk tolerance should allocate less.
Investment Horizon: Longer investment horizons can justify higher allocations to alternatives, as these assets often require patience to realize their full potential.
Liquidity Needs: Typically investors with immediate liquidity needs should limit their exposure to illiquid alternative assets. We aim to fulfill redemption requests on a quarterly, best-effort basis and we don’t have a lockup period which is common for other private credit investments.
Diversification: For many investors, one goal of adding alternative assets is to diversify their portfolio and reduce overall risk. Investors may adjust their allocation to alternatives to complement other asset classes in their portfolio.

Example Allocations
To get a sense of the range you might consider allocating to alternatives, institutional investors like pension funds, hedge funds, and asset managers allocate 3-30% of their investments to private credit. A conservative approach might be on the low end of that range, and an aggressive approach might be on the high end. Here are some examples:

Conservative: 5% to 10% in alternatives.
Moderate: 10% to 20% in alternatives.
Aggressive: 20% to 40% in alternatives.

It’s important to note that these are general guidelines and individual circumstances will vary. Investors should consult with a financial advisor to determine the most appropriate allocation to alternative assets based on their specific financial situation, goals, and risk tolerance.

What is the lock-up period and liquidity policy?

No lockup period

Unlike most private credit funds, Heron Finance doesn’t require a multi-year lockup. There are no lockup periods, which means clients may request redemption at any time on a quarterly basis. There are also zero penalties or fees for redemption.

Our goal is to process all withdrawal requests within one quarter, subject to available liquidity. It is important to note that we cannot guarantee redemption within the quarter. There may be instances where one of the funds that Heron provides exposure to suspends redemption during a given quarter, delaying a withdrawal. We aim to provide efficient processing of redemption requests, and if we anticipate a delay in fulfilling a request beyond one quarter, we will proactively notify our clients.

Where is Heron Financed based?

Heron Finance is headquartered in San Francisco, CA.

Do you support tax advantated accounts like IRAs or 401(k)s?

Yes! Heron has partnered with AltoIRA to make this very easy. If you have an existing IRA or 401(k) account, you can transfer funds for free, or you can deposit cash through Alto. For more information, see our help center article here

What investments does Heron Finance offer?

Heron Finance builds each client a personalized portfolio of exposure to institutional private credit funds. Heron Finance recommends a portfolio allocation composed of exposure from up to thousands of loans, all based on a client’s financial objectives and risk tolerance.

Specifically, you will own contingent payment notes issued by Heron entities that are backed by equity interests in third-party private credit funds.

Through your Heron Personalized Private Credit portfolio, your exposure is based on your risk preferences to potentially thousands of loans in funds overseen by leading private credit managers. These funds are called Business Development Corporation (BDCs), for example the Ares Strategic Income Fund. While there are fully public BDC’s, Heron typically invests in the “non-traded” or “private” variations, which are not available on mainstream brokerages, giving you access to income typically reserved for institutions.

Each month or quarter, Heron receives a cash dividend from the BDCs and pays out income based on your portfolio’s exposure to the underlying loans.

How have these types of loans performed historically?

When you invest in loans with Heron Finance, you are investing in the “private credit” asset class. For more than 30 years, private credit fund managers have provided consistent returns that outperform the S&P 500 (source: Prequin, NYU Stern). They have also done so with lower volatility than the stock market and without a single negative annual return. Obviously, past returns are no guarantee of future results.

To learn more about private credit’s performance, check out our articles:

What are the fees?

1% annual management fee

The only fee Heron Finance charges is a 1% annual management fee. Unlike other investment platforms, we do not charge early withdrawal fees, nor do we take a percentage of returns. There are no additional hidden fees or expenses outside of the 1% management fee.

The yield and distributions shown in your portfolio is net of fees, so this is the amount remaining after fees have been deducted.

What are the criteria for being an accredited investor?

In order to invest with Heron Finance, you must be an accredited investor. The term “accredited investor” refers to a definition created by the U.S. Securities and Exchange Commission (SEC). Anyone automatically qualifies as an “accredited investor” if they meet just one of the following criteria:

Income: Individual income of $200,000, or joint (with a spouse or partner) income of $300,000 for the two prior years, with the same anticipated in the current year
Net Worth: Individual or combined (with a spouse or partner) net worth of $1 million or greater, excluding your primary residence
Exam: A Series 7, 65, or 82 in good standing

You can verify your status as an accredited investor as a part of our sign-up process. The documents you need will depend on the method of verification. You only need to verify via one of the following:

Income verification: Connect your payroll provider, or upload W-2s, K-1s, 1099s, paystubs, or tax returns to verify your income
Net worth verification: Bank statements, brokerage statements, securities holdings statements, certificates of deposit, tax assessments, or appraisal reports (Note: when you use the net worth verification, we pull a “soft” credit report that will not impact your credit score.)
3rd party letter: A letter from an attorney or accountant testifying that you are accredited

To learn more about how to become accredited, see our article: 4 Easy Steps to Becoming an Accredited Investor.

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Disclaimers and footnotes

The information on this website does not constitute an offer to sell securities or a solicitation of an offer to buy securities. Further, none of the information contained on this website is a recommendation to invest in any securities or a recommendation of any interest in any investment offered by Warbler Labs, Inc. or any of its subsidiaries (collectively, “Warbler”).

Any financial forecasts or financial returns, whether in the form of dividend yield or capital appreciation displayed on this website are for illustrative purposes only and are not a guarantee of future results. Private credit investments are subject to credit, liquidity, and interest rate risk. In the event of any default by a borrower, you will bear a risk of loss of principal and accrued interest on such loan, which could have a material adverse effect on your investment. A borrower may default for a variety of reasons, including non-payment of principal or interest, as well as breaches of contractual covenants. Credit risks associated with the investments include (among others): (i) the possibility that earnings of a borrower may be insufficient to meet its debt service obligations; (ii) a borrower's assets declining in value; and (iii) the declining creditworthiness, default, and potential for insolvency of a borrower during periods of rising interest rates and economic downturn.

Any investment target yield presented here is intended for informational purposes only and does not guarantee future performance or results. This model assumes no variability, including no loan defaults, fluctuations in interest rate, customer withdrawal requests, late payments, or penalties, and our management fees have remained unchanged throughout this projection. Please be aware that all investment involves inherent risks, and past performance is not indicative of future outcomes. Customers are advised to consult their own legal and tax advisers regarding their specific circumstances and needs. We do not accept any liability for any loss or damage arising from the use of this information or for any actions taken based on this information without seeking professional advice.

Heron Finance is currently offering promotions for our investors. These promotions are subject to specific terms and conditions, which may change or be discontinued at the company's discretion without prior notice. Participation in any promotional offering does not guarantee future benefits, and eligibility requirements may apply. For full details and the most up-to-date information, please contact us directly at support@help.heronfinance.com

No communication by Heron or any of its affiliates through this website should be construed or is intended to be investment, tax, financial, accounting, or legal advice. Heron Advisory, Inc., d.b.a. Heron Finance is an SEC-registered investment advisor (RIA). Such registration should in no way imply that the SEC has endorsed the entities, products or services discussed herein.