Why Private Credit?
- Seniority in the capital structure supports an attractive, lower risk profile with the Australian regulatory regime providing strong collateral protections
- Highly favourable investment landscape supported by reduced competition from traditional capital sources (i.e banks due to Basel III)
- Less competition and disintermediation relative to other developed credit markets has produced an Australian private debt premia
- Low or negative correlation with other major asset classes, with returns improving during periods of volatility providing resilience throughout the cycle
- Current environment of high risk-free rates plus strong credit risk premia creating a favourable return period for private credit returns
