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 $4.6 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
We are a leading private credit asset manager with a proven track record of maximising capital preservation for investors through cycles.
Investors benefit from our collective platform strength and focussed in-house expertise across segments where we have genuine edge and differentiated capability – diversified private credit, real estate credit and growth credit.
All our private credit strategies leverage the shared benefits and scale of our global platform including access to proprietary deal origination, powerful data analytics, a diverse team of investment experts, and institutional-grade asset management infrastructure.
Our origin as a corporate advisory firm is the genesis of our market-leading workouts capability, with governance, risk management and focus on downside protection embedded in our DNA. It also underpins our core belief that asset managers should be investors too.
We are fundamentally-oriented credit investors, not traders. Our guiding principle is to find scalable opportunities to make loans we thoroughly understand and which generate outsized returns relative to controlled levels of risk over their life cycle. The MA Financial credit philosophy is focused on ‘avoiding losers, not picking winners’ in lending. This investment style is designed to deliver resilient and consistent returns through cycles, rather than to make profits through short-term trading strategies or risk capital impairment in the pursuit of high-risk/ high-return strategies.
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 $190 million into our private credit strategies.
Diversified private credit
Direct corporate lending
- Lending directly to established businesses on a senior secured basis at sensible loan-to-value ratios
- Facilities are secured by the business and cash flow generation potential of the corporate borrower
- Focus is lending to companies with a reason to exist, that are price makers (not price takers), with a defensible market position, sustainable or growing margins, strong financial backing, high quality management and sufficient cash generation to comfortably support the loan.
Asset-backed lending
- Financing diversified pools of assets, such as loans or receivables
- Highly granular collateral and embedded structural credit protection features
- Underlying loans can be in traditional or specialty segments, financing the real-world economy. These portfolios are originated by non-bank financiers, or sometimes even banks
- Traditional loans include mortgages, asset finance, equipment finance, auto/car loans, fleet finance, business loans, commercial loans and consumer loans
- Specialty loans include receivables finance, supply chain finance, legal disbursement funding and insurance premium funding
- Credit facilities can be either senior secured (generally specialty finance) or structured credit (generally traditional loans), made by our managed funds bilaterally or in conjunction with a bank.
Real estate credit
- First mortgage loans to finance the purchase, refinance or development of Australian commercial and residential property
- Involves contractual loans where property is used as security.
Growth credit
- Corporate loans to established business seeking private capital to grow organically or through acquisition
- Loans are secured and interest-bearing with fixed maturities
- The strategy focuses on businesses generating recurring revenues from a diverse client base, leverage a combination of technology and innovation to maintain a competitive advantage, and support a more sustainable future planet and society
- In addition to fixed returns through interest-bearing loans, the strategy seeks to participate in business upside through additional warrants and/or other conversion rights.
Investment series'
Video series: unlocking private credit at MA
In this video series two of our senior leaders – Joint CEO Chris Wyke and Head of Credit Investments and Lending Frank Danieli – provide transparency into our detailed and diligent approach to private credit investing explaining how and why it sets us apart.
Private Credit Investment Series
Through a series of four insights our Head of Credit Investments and Lending, Frank Danieli, introduces private credit, exploring the wide range of opportunities now available for Australian investors.
Real Estate Credit Investment Series
Through a series of three insight pieces, our Head of Real Estate Credit, Drew Bowie, introduces real estate credit exploring its fundamental attributes and advantages.
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.
