TCW Enters Private Credit Market with $450M Asset-Backed Finance Fund, Eyes $5T Market Opportunity

The asset-backed finance sector just got a major player. TCW has rolled out the TCW Private Asset Income Fund (TPAY), a new interval fund targeting private lending opportunities in an increasingly attractive market landscape. With Apollo S3 Credit Solutions coming in as an anchor backer, the fund launched with over $450 million in upfront commitments—a serious vote of confidence in the strategy.

Why Now? The Numbers Tell the Story

Here’s what makes this timing interesting: the U.S. asset-backed finance market is sitting at roughly $5 trillion today, but experts project it’ll balloon to $8 trillion by 2027. Globally, we’re looking at $20 trillion. That’s not small change. Wealth advisors are quietly shifting their allocations too—moving from single-digit exposure to alternative investments toward 15%+ targets over the next decade. Private credit is one of the fastest-growing categories fueling this shift.

The macro backdrop is driving this rotation: investors want diversification, they’re hungry for income, and they’re looking for inflation hedges. TCW’s entry signals that institutional capital sees real opportunity here.

How TPAY Works

The fund focuses on private lending deals that support the real economy, with a twist: roughly 20% sits in liquid structured products to manage redemption cycles. This isn’t just corporate credit bundling—TPAY can hunt opportunistic trades across the asset-backed finance capital stack, which theoretically should deliver better portfolio isolation from traditional credit correlations.

The pitch is straightforward: attractive risk-adjusted returns plus consistent income generation, all backed by TCW’s deep bench in securitized assets and private credit markets.

The Team Running It

Dylan Ross, who joined TCW in 2024 to spearhead the asset-backed finance push, is co-leading the effort. He brings two decades in alternative credit with heavy structured credit and asset-backed finance chops. Max Scherr came over from Brigade Capital late 2024, where he ran financial investing including securitized and structured credit plays. Peter Van Gelderen rounds out the trio as Co-Head of Global Securitized within TCW’s Fixed Income division—managing over $80 billion in securitized assets alone.

This isn’t a green team stepping into unfamiliar territory. TCW has been in the private credit and securitization game for decades, and TPAY is essentially the firm’s formalized bet on the asset-backed finance expansion.

What It Means for Investors

TCW private credit strategies have traditionally been institutional-focused. TPAY breaks that mold by opening the door to a broader wealth investor base. The interval fund structure gives individual and advisors exposure to what was previously a largely closed ecosystem, though investors should understand that interval funds aren’t as liquid as traditional funds—redemptions happen quarterly at predetermined levels.

The fund targets excess risk-adjusted returns through a less crowded corner of the fixed income universe. Whether that materializes depends on TCW’s execution and how the broader credit environment evolves, but the fundamental thesis—that private lending will grow as banks pull back—remains intact.