Private credit has become one of the fastest-growing corners of Australian finance. With more than 100 managers now active in the market, capital is flowing into non-bank lending at a pace not seen in decades.
The idea of regular, consistent payments is a critical part of an income-focused portfolio. Ensuring that a portfolio actually looks and works that way across extended periods can take a bit more planning. It’s not as simple as bunging everything into a bond and taking a monthly coupon.
For decades, the ‘Big Four’ banks were the gatekeepers of Australia’s credit market. If you wanted a loan, you had little choice but to enter a bank branch, where options would be limited to that specific institution’s products.
In recent years, private credit has emerged as a mainstay source of income for many investors, particularly retirees. In an environment defined by persistent inflation, increasingly volatile equity markets, and rising interest rates, some investors have been increasing their exposure to private lending strategies offering yields of 7 to 10% or more.
The idea of regular, consistent payments is a critical part of an income-focused portfolio. Ensuring that a portfolio actually looks and works that way across extended periods can take a bit more planning. It’s not as simple as bunging everything into a bond and taking a monthly coupon.
For decades, the ‘Big Four’ banks were the gatekeepers of Australia’s credit market. If you wanted a loan, you had little choice but to enter a bank branch, where options would be limited to that specific institution’s products.
In recent years, private credit has emerged as a mainstay source of income for many investors, particularly retirees. In an environment defined by persistent inflation, increasingly volatile equity markets, and rising interest rates, some investors have been increasing their exposure to private lending strategies offering yields of 7 to 10% or more.
There’s a concerning trend at play on the ASX: the number of listed stocks is shrinking year in, year out. This is the opposite of most investors want, which is access to a large and diverse range of listed businesses with high disclosure standards.
We investigate the mysterious case of the shrinking ASX below.
In recent years, the private equity sector has increasingly cast its fund raising net to include individual investors who are aiming to generate strong risk-adjusted returns over the long term. With more investors considering the private equity opportunities on offer, it’s worthwhile delving into this opaque sector’s unique benefits and challenges.
You may have noticed you’re hearing more about private debt (also known as private credit) as an asset class these days. You’re not imagining it. Private debt is booming as an asset class. Preqin estimates the sector’s assets under management will grow from US$1.5 trillion in 2022 to US$2.8 trillion by 2028, reflecting growing awareness of the sector’s solid income generation credentials.
Among the attractions of an investment in an unlisted private credit fund is avoiding the volatility associated with the public markets.
There is a downside to not marking-to-market, as it risks a fund holding assets at a Book Value well in excess of Fair Value.
Wholesale private credit products offer investors access to unique and attractive investment opportunities not usually available to the retail investor market.
Because wholesale products don’t provide investors with the same consumer protection as retail funds, it’s important to review the offer document in full and seek advice if required.