Private credit
Private credit is an attractive addition to the defensive portion of an investment portfolio. We offer diverse investment opportunities across the private credit market spectrum.
Overview
Private credit is the provision of loans by credit funds directly to institutional borrowers (as distinct from public bond markets or bank lending). This enables investors to capitalise on areas of lending where banks are not the efficient providers of capital, due to regulatory, structural or market forces.
Private credit is gaining market share as investors seek a defensive allocation and to diversify away from public market volatility, while delivering outstanding risk-adjusted returns in credit investments that are secured, collateralised or otherwise have strong downside protection features.
The defensive position in the capital structure provides a margin of safety while the floating rate nature of returns provides a hedge against inflation.
With deep expertise in credit, non-bank lending and speciality finance, our investment philosophy prioritises protecting investor capital with secure downside protection while generating regular and predictable income secured through contractual borrower agreements.
With a proven performance track record and an unbroken history of credit AUM growth, our clients currently entrust us to manage $4 billion on their behalf.1
Including private credit as part of a diversified portfolio can deliver a number of key benefits:
- attractive yields – potential for strong, enhanced yields
- low correlation, resilient returns – historical returns have low to negative correlation to other asset classes2
- regular and stable income – potential for regular and predictable income secured via contractual borrower agreements
- low volatility – returns are contractually agreed so generally less volatile for performing assets than equities
- diversification – highly granular curated portfolios of loans with exposure to a wide variety of borrowers, assets, industries and geographies
- robust fundamentals – private markets enable a fundamentals-first mindset, focusing on borrower quality, collateral strength and the likelihood of being repaid as a lender, rather than influenced by sentiment-driven momentum trades.
Our capabilities
MA Financial offers specialised in-house expertise in private credit, with proprietary deal sourcing, a proven investment execution track record and robust portfolio management capabilities.
We invest across a range of private credit market segments where we have genuine edge and differentiated expertise.
We are fundamentally-oriented credit investors, not traders. Our guiding principle is to find scalable opportunities, to invest in loans we understand thoroughly, and which generate outsized returns relative to controlled levels of risk over their life cycle. Our investment style delivers resilient and consistent returns through cycles, rather than to make profits through short-term trading strategies.
To support our investment strategies, we have developed powerful data analytics capabilities and an empowered risk management culture founded on principles of alignment and downside protection. Our funds also benefit from a market leading workouts franchise, maximising capital preservation for investors through cycles.
Our conviction runs deep and as testament to this we co-invest in many of our strategies alongside our clients, aligning our interests with theirs. Reflecting this philosophy, MA Financial and its staff have co-invested over $125 million into our private credit strategies.
Real estate credit
First mortgage loans to finance the purchase or development of Australian commercial and residential property, real estate credit involves contractual loans where property and/or land is used as collateral or security. The strategy aims to deliver fixed payment dates of interest and return of capital.
Asset-backed lending
Financing diversified portfolios of loans, assets or receivables originated by banks or non-bank finance companies, this segment has a strong track record in Australia and a robust, long-term history of resilient performance globally.
Asset-backed lending includes investing in portfolios of traditional and specialty loans. The underlying loan portfolios are highly diversified, often with thousands of differentiated assets forming part of the security pool, while the loan facilities benefit from further structural features providing additional credit protection to the private credit lender.
- Traditional loans: includes residential and commercial mortgages, asset and equipment finance, auto and fleet finance, consumer and corporate loans.
- Specialty loans: includes receivables finance, supply chain finance, legal disbursement funding, insurance premium funding, and other types of specialised commercial and asset-backed finance with bespoke features.
Corporate and direct private credit loans
Lending directly to businesses on a senior secured or structured basis. These facilities are secured by the business and cash flow generation potential of the corporate borrower.
This strategy aims to lend to companies that are price makers (not price takers), with a defensible market position, sustainable or growing margins, strong financial backing and at sensible levels of leverage. Private credit financiers seek to provide financing at loans to value which mean it is the equity, not the senior credit provider(s), which is exposed to downside risks through the economic cycle (through fundamental performance or asset price volatility).
Growth credit
Lending directly to established, growth-stage companies via secured interest-bearing loans with fixed maturities. In addition to providing investors with quarterly cash distributions through interest-bearing loans, the strategy seeks equity-like upside participation through additional warrants and/or other conversion rights.
This strategy aims to lend to companies that leverage a combination of technology and innovation to maintain a competitive advantage and support a more sustainable future planet and society.
Investment opportunities
Individual investor
Wholesale investor
MA Priority Income Fund
A diversified private credit fund with a unique structure. The Fund provides investors exposure to a diversified portfolio of defensive credit investments seeking to preserve capital and deliver stable monthly income of the RBA Cash Rate + 4.00% p.a. (current target return 8.35% p.a.).¹
MA Secured Real Estate Income Fund
A real estate credit fund available to retail investors. Provides investors access to a diversified loan portfolio secured by registered first mortgages over Australian property, seeking to preserve capital and deliver monthly income of the RBA Cash Rate + 5.00% p.a. (current target return 9.35% p.a.).¹
For more information and to arrange a discussion, please contact us.
- As at 31 December 2023
- Past performance is not a reliable indicator of future performance
This webpage is issued by MAAM RE Ltd 34 135 855 186 AFSL 335783 (MAAM RE) and MA Asset Management Ltd ACN 142 008 535 AFSL 427515 (MAAM). The information has been prepared without taking into account your personal objectives, financial situation or needs. Before making any investment decision in relation to any financial product referenced on this website you should consider obtaining professional investment advice that takes into account your personal circumstances and should read the current information memorandum or product disclosure statement (PDS) for the relevant financial product. The PDS for each financial product can be obtained and downloaded on the Resources page. The Information Memorandum for each financial product can be obtained by contacting us at MAclientservices@MAFinancial.com. No information on this website, or any document accessible from this website should be construed as investment advice or relied upon in making an investment decision. Information on this website does not constitute an offer or an invitation in any jurisdiction where, or to any person to whom, it would be unlawful to make such an offer or invitation.
Neither the Trustee nor any member of the MA Financial Group Limited group guarantees repayment of capital or any particular rate of return from any product. Past performance is not a reliable indicator of future performance. Neither MAAM RE, MAAM nor any MA Financial group company gives any representation or warranty as to the currency, reliability, completeness or accuracy of the information contained on this website. All opinions and estimates included on this website are provided as at the website creation date and are subject to change without notice. Neither the Responsible Entity nor any member of the MA Financial group make any representation or warranty, express or implied, that the information and materials contained on this website are up to date, accurate or complete. To the maximum extent permitted by law, neither MAAM RE, MAAM nor any other person will be liable for any for any loss or claim resulting from or in connection with the website and any information contained herein.
