In an interview with AusBiz’s Juliette Saly, Managing Director and private credit Portfolio Manager John Sheffield discusses key drivers behind the growth in asset-backed lending.

John explains that while asset-backed lending – where consumers or businesses seek finance for a range of purposes including mortgages, car loans, supply chain finance – has been around for a long time, it’s more readily understood now in the market.

John notes that since the GFC and due to structural shifts in regulatory capital requirements banks have reduced participation in this type of lending, allowing non-bank lenders to fill the gap and provide financing solutions to otherwise good borrowers.

He also explains the importance of asset managers carefully managing risk in private credit as investors seek a defensive allocation for their portfolios and away from public market volatility.