Private credit for the people
There are concerns that private credit is a late cycle play drawing in unsophisticated money. Others argue the withdrawal of banks is bringing in non-bank players who understand the market. And private wealth funders.
Private credit is growing as one of the hottest areas of interest in Australian investing, raising concerns it is a late cycle play drawing investors not across the risk. In the US it dominates commercial property lending to such an extent that regulators worry about systemic risk.
It’s not at that scale in Australia yet, totalling around $200 billion in debt compared with $5 trillion lent by the banks, and the great weight of money is sourced from the typically prudent superannuation sector. But as we reported a few weeks ago, not a week goes by without activity.
GSFM CEO Damien McIntyre has a simple explanation: “It’s the democratisation of private assets”.
GSFM has multiple investment partners including John Wylie’s private debt fund Tanarra Credit Partners. GSFM notes “private credit typically has low correlation with other asset classes, is less volatile, and provides excellent diversification and yield benefits within a broader fixed income portfolio”.
