Private debt

There are three things that an Australian private credit provider should be focussed on, and capital preservation is the “absolute number one”, according to Craig Brooke from KeyInvest.

Proper valuations are crucial to the transparency and stability of the private credit market, but the valuations that investors rely on are often just a story – and not the whole story either.

The respected property and investment research agency has given out its second-highest rating to Alceon’s property-based Debt Income Fund, which serves to highlight just how well the private debt sector can perform if done right.

2023 may have had its challenges, but the cream of the private credit crop still managed to write plenty of loans. As inflation cools, the outlook for non-bank lenders in the commercial real estate sector, especially, is encouraging.

A higher for longer interest rate environment and likely default cycle in high yield means investment grade credit is once again in the hot seat.

Spurred by the speed and flexibility of private credit, developers are eschewing banks in favour of trusted non-bank lenders. The lending market’s evolution is good news for housing in Australia.

As market conditions turn, private debt is expected to lead the charge of private capital disbursement across the globe, with special purpose vehicles increasingly at the heart of deals according to a new study.

As the world of private capital expands, and advisers depend on it more as an alternative diversifier, one group has questioned whether advice clients know enough about it and if more education is required.

Market forces and changing winds in the banking sector have supercharged private credit, which is growing faster than any other arm in private capital. For advisers, that might mean reassessing which portfolio sleeve it slots into.

It’s been lauded as anything from a ‘”short-term fad” to the next great diversifier, but while private credit polarises investors it continues to provide robust, stable returns. Are private credit managers good enough to maintain their rapid ascension in the private capital arena?

While private credit is experiencing growing pains in some major markets, its rise continues apace back home with Regal Partners making another significant acquisition in the sector.

Real estate credit funds have firmed as an attractive source of alternative returns in the past few years. What matters, however, and what doesn’t, for these non-bank private credit lenders, has largely been left unexplored by investors.