The Globe and Mail reports in its Wednesday edition that almost 40 per cent of the loans in a private debt fund run by Ninepoint Partners LP and Third Eye Capital Management have not required cash interest payments since their inception -- and have not paid them -- while another 25 per cent have the option to defer their cash interest payments. The Globe's Tim Kiladze writes that loans that do not pay cash interest are known as PIK loans, short for payment in kind, and are similar to IOUs that defer cash interest until the total debt comes due. These loans can reward investors with more interest when they mature, but PIK loans can be risky. The fund in question, the Ninepoint-TEC Private Credit Fund II, is managed day to day by Third Eye and marketed to investors by Ninepoint. Ninepoint restructured the fund in September to assuage disgruntled investors, and ultimately just 10 per cent of them formally requested to take their money out. Despite these developments, more asset managers are launching private debt funds that target retail investors in Canada, including Brookfield. What was once sold as a way to earn decent yields in an era of ultralow rates is now often marketed as a form of inflation protection.