Private credit investor GCI is looking to lend where the banks won't
As the big four retreat from lending, GCI co-founder Gavin Solsky explains how money can be made by lending in places where banks won't go and when equity is too expensive.
Banks in Australia, by both choice and the pressure of regulation, have become more risk averse. That restricts losses but the collateral impact is less funding for less conventional or more adventurous propositions. It’s a discussion we kicked off in Capital Brief which has now gained wider traction.
But the withdrawal of banks from some sectors provides opportunities for non-traditional providers of capital, be that VC, private equity, private debt or other niche investors. GCI is one of them. Co-founder Gavin Solsky says the firm looks for opportunities the banks would “run a mile from”. A full transcript of his interview is provided below.
“The Royal Commission scared the life out of them to some degree. They’re just very risk averse,” he says. “And that's very bad. That's obviously bad for borrowers. But it creates opportunities for private credit.”
Formed less than a decade ago by Solsky – a former management consultant – and Steven Sher - with a background in private equity and debt – GCI essentially goes where banks dare not go. That may be because the deal is too small, the industry’s problematic or banks can’t be too creative with their standardised credit processes. Today funds under management have topped $500 million.
