Investor Knowledge
November 04 2026

Ten years of Private Debt at TD Asset Management: Income with a job to do

10 minutes

For TD Asset Management ("TDAM"), Investment Grade Private Debt has served as more than a potential source of incremental yield for our Canadian Institutional clients. It has helped turn a liability-matching and income-enhancing exercise into a broader source of contractual cash flows, geographically and sector-diversified, without currency risk.

Our 10-year track record was resilient to more than one market regime. Since the Private Debt Strategy (the "Strategy") launched in 2016, markets have moved through low government yields, a global pandemic, and some of the fastest inflation shocks in decades. These challenges fostered an abrupt repricing of interest rates, a revaluation of asset classes and renewed geopolitical uncertainty. Underwriting faced new deglobalization trends, tariffs and a frenetic artificial intelligence ("AI") infrastructure build out. Through those shifts, the purpose of the Strategy has remained consistent: generate enhanced yield while maintaining resilient investment-grade quality through underwriting discipline.

For fixed-income investors, those distinctions matter. Return seeking is not the first job of a fixed-income portfolio. Reliable cash flow denominated in CAD, duration alignment, credit discipline, and appropriate illiquidity compensation come first. The opportunity in private debt is to preserve those priorities while adding income from geographies, asset classes, deal structures and borrowers that public markets do not offer.

  • Global Container Terminals Inc.

  • East-West Tie Limited Partnership

  • Enfinium Holdings Limited

Built for the liability side of the balance sheet

The two funds, TD Emerald Private Debt Pooled Fund Trust ("Universe") and TD Emerald Long Private Debt Pooled Funds Trust ("Long Private Debt"), were designed around complementary liability profiles. The Universe Fund is positioned against the broad Canadian bond universe with a duration of roughly 7 years, while the Long Private Debt Fund extends the lending opportunity into longer-duration assets with fund duration of roughly 12.6 years. In each case, benchmark duration remains the anchor. Security selection, global origination channels, unique transaction structures and the ability to underwrite, deploy capital and hedge foreign exchange risks are the principal tools TDAM uses to extract premium income and add value.

The focus is investment-grade deals across infrastructure, power generation and transmission, renewable energy, private corporate lending, credit tenant leases, real estate ground leases, and private securitization. Foreign currency cash flows are precisely hedged back to Canadian dollars, converting global opportunities into a cash flow stream that can support domestic liabilities without introducing unplanned exposures and risks.

The result is a practical extension of a fixed-income toolkit: a precise solution for our clients' interest-rate sensitivity – alongside a broader issuer set and an additional source of credit spread pickup. Private debt, however, does not replace public bonds. It complements them by significantly widening the investable universe and placing more emphasis on contract terms, collateral, covenants and lender protections.

A decade measured in income

The anniversary provides a useful moment to examine both the full track record and the most recent five years. Over the 10 years ended July 31, 2026, the mid-duration (Universe) strategy delivered an annualized return of 3.53%, compared with 1.47% for its benchmark, for annualized added value of 2.06%. Over the same period, the long-duration (Long Private Debt) strategy returned 1.66% annualized versus 0.35% for its linked policy benchmark, adding 1.31% per year. 

Fund / BenchmarkMeasure10-year5-year3-year1-year
TD Emerald Private Debt Pooled Fund TrustFund3.53%2.60%7.16%4.71%
Benchmark — FTSE Canada Universe Bond Index1.47%0.28%4.26%2.61%
Added Value2.06%2.32%2.90%2.10%
TD Emerald Long Private Debt Pooled Fund TrustFund1.66%-0.15%4.84%3.05%
Benchmark — 75% FTSE Canada Long Term Overall Bond Index, 25% FTSE Canada Universe Bond Index0.35%-2.59%2.45%1.68%
Added Value1.31%2.44%2.39%1.37%

Source: TD Asset Management as of July 31, 2026. Reinvestment Series, gross of expenses. Added value is arithmetic. The long-duration benchmark is geometrically linked and changed on July 1, 2025. Numbers may not add due to rounding.  Note: Returns for periods greater than one year are annualized. Past performance: Any performance information referenced represents past performance and is not indicative of future returns. There is no guarantee that the investment objectives will be achieved.

Put simply, both strategies did what they were designed to do—and then some. The Universe strategy comfortably exceeded its 1.25%–1.75% value-added target, while the Long Private Debt strategy also cleared its 1.00%–1.25% target.

The five-year lens is equally important because it captures a demanding period for fixed income and rate-sensitive markets globally. The path was not smooth but what differentiated the outcome was the accumulation of additional income and the discipline in managing and underwriting credit through the cycle.

Relative value is the operating discipline

A private label is not, by itself, an investment case. Every transaction must earn its place in a portfolio relative to a public alternative of comparable credit quality. The team decomposes prospective yield at origination into the underlying risk-free rate, public-equivalent credit spread, a uniqueness premium and, where relevant, incremental value available through cross-currency swaps. That framework keeps the conversation centred on compensation for risk. 

Over the franchise history, our private debt has generated a working range of 50 to 100 basis points of excess spread over comparable corporate bonds. We remained diligent allocators and when pricing becomes crowded, the correct response is often to wait, not to lower standards. Thus, our favourite origination model is to be either a single lender or part of a small club of lenders on a deal which usually results in a more bespoke lending structure and is compensated accordingly in the form of higher uniqueness premium. 

As of June 30, 2026, the platform had completed more than 126 transactions since inception and deployed more than C$5.6 billion of capital. The next-12-month pipeline included more than 80 opportunities representing approximately C$30 billion of investable assets. Breadth creates the option to say no. In private markets, that option is valuable.

Diversification that public markets cannot replicate

The Canadian public bond market is deep, but it is not equally deep across every sector, geography or tenor. Importantly - Canadian institutional clients would potentially already be substantial holders of the fixed income securities in that market. 

Private markets provide access to contracted infrastructure, renewable power, social infrastructure, transportation assets, real estate financing and private corporate issuers whose economics are not represented in the same way in domestic indices.

The Universe strategy held 93 private debt issuers across Canada, the United States, the United Kingdom, Europe and Australia. The Long Private Debt strategy held 50 private debt issuers, with a larger allocation to infrastructure and real estate-linked assets. This diversification is intended to reduce dependence on any single domestic sector while sourcing long-lived CAD-hedged cash flows from developed-market legal regimes with predictable and reliable credit frameworks.

Credit discipline from origination to maturity

A long holding period places more weight on the original underwriting decision. The franchise applies the same internal credit framework to public and private investment-grade debt, supplemented by transaction-specific analysis of collateral, covenants, legal structure and reporting requirements. Each investment moves through deal identification, pre-assessment, due diligence, credit committee approval, closing and ongoing monitoring.

The “cradle to grave” philosophy is important. The team that helps originate a transaction remains accountable for monitoring it. Material changes can be brought back to the credit committee, and internal ratings are reviewed at least annually. For long-term holders, this continuity matters as much as entry spread. Incremental income is only valuable if the credit thesis remains intact.

The next decade: same objective, wider opportunity set

The market opportunity will change. Public spreads may remain tight or widen. Issuance may accelerate and we see potential opportunities in economic and social infrastructure, energy transition, AI-related power demand, private corporate credit or real estate finance. The strategies should not depend on predicting which theme wins. Its advantage should continue to come from a repeatable process: source broadly, underwrite independently, compare every deal with a public alternative and invest only when the structure and compensation for risk are aligned.

For long-term investors, the anniversary is therefore less a finish line than a proof point. Over 10 years, the strategies have sought to keep duration aligned, convert global opportunities into Canadian-dollar cash flows and compound incremental income relative to their benchmarks. That is a straightforward proposition, but not an easy one to execute. The last decade suggests that disciplined private debt can earn a durable place alongside public bonds.  

We have been proud to serve a broad range of Canadian institutional investors, including pension plans, insurance companies, corporations, endowments and foundations. If you are interested in discussing a Private Debt opportunity, please reach out to a TDAM relationship manager. 

For Canadian institutional investment professionals only. Not for further distribution.

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