June 24, 2025 • 17 mins
In volatile markets, is there anywhere you can safely invest your hard-earned cash?
In this episode of the Friends With Money Podcast, Michelle Baltazar, editor-in-chief of Money Magazine, discusses the concept and benefits of Global Private Credit with Nehemiah Richardson, chief executive and managing director at Pengana Credit.
The discussion centers around why diversification, especially in financial uncertain times, is important and how Global Private Credit can offer attractive investment opportunities.
They also touch on how retail investors can access this asset class and introduce Pengana's TermPlus product.
00:19 Market whiplash and diversification
00:56 Understanding Global Private Credit
01:51 Investment characteristics and benefits
04:14 Risk mitigation and manager selection
06:17 Local vs. global private credit
10:12 Innovations in global private credit
10:56 TermPlus: A new investment product
14:37 Final thoughts and advice
#friendswithmoney #michellebaltazar #nehemiahrichardson #pengana #globalprivatecredit
Links: https://termplus.com.au/
Email Us: podcast@moneymag.com.au
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**Proudly brought to you by Pengana Capital
Pengana Capital Limited (Pengana) (ABN 30 103 800 568, AFSL 226 566) is the issuer of units (Term Accounts) in TermPlus (ARSN 668 902 323). Any advice provided is general in nature and does not take into account your particular objectives, financial situation or needs. You should consider the PDS and TMD available at www.termplus.com.au before investing in TermPlus. For further details, please see the Important Information page at www.termplus.com.au/important-information/.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Welcome to the Friends with Money podcast, brought to you
by Money Magazine, creating financial freedom for Australians since nineteen
ninety nine.
Speaker 2 (00:12):
Welcome to Friends with Money. I'm your host, Michelle Baltazar,
editor in chief of Money Magazine. Thanks for joining us.
The market whiplash in the last two months due to
Trump's on again, off again tariff since April has unnerved
many share market investors and it reinforced the value of diversification,
particularly across fixed income. In today's episode, we're going to
(00:36):
talk about one type of fixed income called global private credit,
and joining us is Leemiah Richardson, chief executive and Managing
director at Pengana Miamayah. Thanks for joining us.
Speaker 3 (00:49):
Yes, thank you for having me, Michelle. Pleasure to be
here today.
Speaker 2 (00:52):
So let's get to the first and fundamental question.
Speaker 4 (00:56):
What is global private credit.
Speaker 3 (00:58):
So when we referred to global private credit, we are
talking about the US and European markets, okay, So we're
not talking about Australia or we're talking about US and
Europe Okay. I think is critical and that's because in
those markets, this is a very large, mature market that's
been growing very quickly, been around for twenty five years
(01:20):
with many managers who have proven track coursers of success
in it. So what is it? It is lending to
companies predominantly, and it's where banks have exited lending in
these spaces. So about eighty five percent of a lot
of these corporate segments that our managers invest in provide.
(01:40):
Eighty five percent of lending to those segments is done
by profit credit managers, so professional credit managers, and fifteen
percent by banks, and that continues to continues to grow.
So it provides really attractive investment characteristics to investors off
the back of lending to very defensive, non cyclical companies
(02:03):
in those jurisdictions.
Speaker 2 (02:05):
So investors understand the kind of rates they would get
from term deposits, for example, or from banks where it's
the savings rate of anywhere between two and four percent.
So why should they look at global private credit what
would be the interest rate profile?
Speaker 3 (02:22):
Yes, So what you'll find is that there's feeling things
that are important there. Number one is it's contractual income
and it's floating rate, so it's a fixed spread over
the cash, right, okay, and so moves with interest rates.
So what's really nice about that is an inflationary environment
where the cash right goes up, you're actually protected because
(02:43):
it's a fixed percentage above a cash right right. So
for example, we have a one year term account just
part of one of our products that offers three percent
over the RBA cash right. You know, we have other
products that offer different types of spreads. But that's really
a consequence of fund managers who will make a loan
(03:04):
to a company and they will hold it until it's
paid back in full, and as a result of that,
you tend to get they call it an illiquidity premium,
but you tend to get anywhere between, you know, sort
of a percent to two percent sort of premium for
the fact that they're holding them to maturity. They are
not trading them out in the market and getting a
(03:26):
fee for that. They actually want to get paid back,
and as a result, you have this what they call
illoquidity premium attached to it. And that's why the interest
rates are really attractive relative to the risk that you
know that has taken on any individual loan.
Speaker 2 (03:42):
You mentioned earlier that you are not a bank, and
I think this is important for investors who have invested
in say a savings account or a fixed term deposit
that is guaranteed by the government, So that's up to
two hundred and fifty thousand with a bank is guaranteed
by the government in case of something happening to the market,
(04:05):
for example. So how can people or investors be protected
when they invest in something that is not provided by
a bank.
Speaker 3 (04:14):
Yes, so there's a number of different things that allow
you to mitigate the risk, okay in this So Number one,
it comes down to the manager and how they invest.
So how selective are they? So your top managers in
the space in the US and Europe very selective about
who they lend the money to, okay, And that's why
it's to defensive industries, non cyclical industries, kind of boring
(04:38):
cash flows, healthcare, business services, software, very stable industries with
market leading companies. Number two senior secured. So what that
means is you're investing at the top of the capital
structure at a low loan to value ratio, typically between
thirty and fifty percent. You have priority of income payment,
(05:00):
have security to get paid back, and you have priority
of getting paid back before anybody else does should the
company run into trouble. Number three widely diversified portfolios, Okay,
so any one, any one loans. For example, our portfolio
that we invest in has over two thousand individual loans
across twenty managers, because we're trying to eliminate any idiosyncratic risk,
(05:24):
any single name risk, single manager risks, single loan risk,
so that if one was to underperform or one loan
was to go into loss, it would have no real
impact on the overall return in the portfolio. So it's
those types of disciplines that actually helped to support the
credit profile. And that's really you know, kind of different
(05:45):
layers of defense, if you will, for investors to feel
comfortable investing in the asset class.
Speaker 4 (05:51):
Definitely no junk bonds. I know that's good.
Speaker 2 (05:56):
So I think a lot of our listeners understand local
private credit, where we're talking about companies that they're familiar with,
whether it's corporate credit through a top two hundred company,
or it's just understanding how businesses work and they need
to borrow money either from a bank or a non bank.
(06:17):
But tell me why it's important for investors to consider
not just local private credit, which they know, but global
private credit, where arguably we don't really understand how businesses work. Overseas.
Speaker 3 (06:30):
Yeah, so a couple of things there. So, so firstly,
just to touch on assie private credit, if you look
at the structure of our market, about ninety percent of
all lending is done by banks. Ten percent is done
by private credit, okay, and so it's actually you know,
quite a small subset of the overall lending market, which
is which is why it's it's it's really concentrated predominantly
(06:52):
in commercial property, but also you know in as subordinated
positions in asset back vehicles, and you'll see it in
kind of widely syndicated loans for big pe deals. That's
those that's where it's really concentrated. You know, there's there's
a tail, but that's predominantly what you get. And if
you look overseas, what you'll find is it's sort of
(07:12):
the exact opposite. So you have big sections of the market,
so companies that are you know, sort of a billion
plus and size that really aren't serviced by the banks anymore.
Eighty five percent of that market is banked by profit
credit providers and the balance by banks. And they used
to be companies that were bank that were on the
(07:33):
bank balance sheet, but since the GFC because of regulatory
changes in the US and Europe right, banks don't have
an incentive to lend to them anymore. Okay, because in
the European and US markets that were really hit hard
by the GFC, the regulators really don't want banks holding
long term assets funded by short term deposits. So it's
(07:56):
about the liquidity mismatch. And so as a result, you
have a lot of these great companies, great market positions.
Banks would love to lend them, but they have to
hold too much capital against them, so the returns aren't
as attractive as where else they could deploy their capital.
As a result, you have private credit providers who raise
institutional funds and now increasingly you know funds from retail
(08:19):
investors that are used as the funds that are then
lent to these companies. So it's interesting because if you
go to those markets, the US and Europe, it's much
more widely known and much more widely understood. And the
analogy I like to use here is I remember, you know, say,
if you look back twenty five years ago here in
(08:41):
equity portfolios, it was domestic equities. And yes, broadly speaking,
people wouldn't do global equities.
Speaker 4 (08:47):
No, not at all.
Speaker 2 (08:48):
We were all about our dividend generating shares.
Speaker 4 (08:52):
Yes, precisely.
Speaker 3 (08:54):
Right now, how many portfolios today and if you have
someone professionally constructing your portfol or an advisor managing your
portfolio would tell you it should all be in domestic
equities and not in global equities. Wouldn't happen And I'd
say the same thing. You know, the industry in the
US and Europe's been around over twenty years. It's much
more accepted and understood because the opportunity has been available.
(09:20):
It's now become available here. And I feel like it'll
end up you fast forward five years time, you'll end
up in the same position that we did with equities. See,
it'll be a staple as part of a broad portfolio.
It'll be a staple allocation because of these attractive characteristics.
Speaker 4 (09:35):
I'll tell you what.
Speaker 2 (09:35):
We will have this interview again in twenty thirty and
we'll see what the split.
Speaker 1 (09:41):
Is.
Speaker 4 (09:41):
But you are quite right.
Speaker 2 (09:44):
I remember covering Aussie shares versus global shares allocation two
decades ago and it was like, no, we don't want
any of the global shares.
Speaker 4 (09:53):
We're happy with local shares.
Speaker 2 (09:56):
But I just want to point out again that the
statistic from the IM that global private credit assets under
management have quadrupled over the past decade to US two
point one trillion. So what are the latest innovations in
this space?
Speaker 3 (10:12):
Yeah, so I think the single biggest innovation, I would
say is retail investors getting access to what has been
an asset class at only institutional investors could access, like
the future funder industry superfunds. And that's just because there's
been some significant barriers or obstacles for retail investors to
be able to access it. And I think people like us,
like the Pangana Credit Group, have overcome a lot of
(10:35):
those obstacles to make it very easy for a retail
investor to get access to top rating managers on a
highly diversified basis.
Speaker 2 (10:43):
So let's say one of our listeners is saying, I'm
close to retirement, I'm now thinking of shifting some of
my investments in SCHZ to now more fixed income or
something that provides a steady income. I know that Pandana
partnered with Merca to create this product called term plus,
(11:03):
So how would you describe that, Like, what is the
minimum investment and what are the three key features of
term plus, bearing in mind that a lot of our
listeners are probably thinking term plus is at a term deposit.
Speaker 3 (11:17):
So the first and very important to say we are
not a bank, okay, But what we've done is, like
I said earlier about global profit credit, global profit credit
is professional managers who provide lending to defensive companies on
a secured basis. Okay. So basically what you have is
(11:38):
we've built one, two and five year term products. So
for by Wave example, a one year product is RBA,
so it's fixed against US a fixed percentage above the
RBA cash. Right. So our one year product, for example,
is RBA plus three percent, so as the RBA price moves,
we will pay three percent over the RBA, right. And
(12:00):
where that really comes from is when you invest in
our funds. What we do is we invest in our portfolio.
Our portfolio has twenty one managers across the US and
highly diversified, so twenty one funds across the US and
Europe over two thousand individual loans, so there's no concentration,
there's not one single loan will make a difference to
(12:22):
the overall portfolio. And it's it's as diverse as possible
to kind of minimize any type of concentration risk, so
that one dollar sort of gets split across two thousand
plus loans provides you with stable monthly income that's annualized
RBA plus three percent, for example on our one year product.
The other things that we've done is we invest for
(12:45):
every dollar we get from an investor, we invest five
cents of our own capital, okay. And what that is
there for is really to do two things. It's really
to help to protect support the income payments, and it's
also there to support repayment of capital. So very simplistically,
(13:06):
we do not get paid income on our capital until
every one of our vestors, of our investors across our
term accounts gets paid. And so it's always that the
investor gets paid first, and then at maturity, if for
whatever reason there was an impairment in the fund that
meant you couldn't get your capital back, we basically will
(13:27):
use our capital to support to ensure that we can
provide some capital support to getting that dollar back for you, okay.
So it's really building in some additional protections over and
above the protections that come from the way that our
managers invest. The wide diversification in the portfolio, the security
(13:48):
that sits behind all of these loans. Okay, so we
feel really proud of having introduced that innovation into the
product to really make this accessible at a minimum two
thousand dollars investor and a very sort of defensive, defensive investment.
Speaker 2 (14:05):
Which I think is quite relevant and timely right now,
where geopolitics is truly doing a recalibration or reset of
the markets, and how do we value shairs and is
it going to be a recession or not a recession
and all of that. There's definitely a lot to unpack there.
(14:25):
But as I mentioned earlier, this is a two point
one trillion dollar asset class, so it's quite hard to
ignore it and it's set to just keep growing bigger.
Nea maya any other words of advice to our listeners, Yes.
Speaker 3 (14:42):
I think Number one, it's a must for investors to
look at this asset class, and the reason being whilst
you have lots of different investments you can do in Australia,
this is a very mature, it's been around a very
long time, mature diversified asset class, done very professionally with
long track records of performance. Number one. Number two in
(15:04):
an environment where geopolitically from a risk volatility perspective, and
equity markets and traded credit markets. You know, I think
the need for defensive, income oriented assets is critical that
do not trade, that are very well managed then provide
stability of return, particularly when you think about the demographic
(15:26):
challenges that we face with aging population as you go
into retirement. It is a must for that reason. It's
a must look and there's many resources that you can
that you can find online to learn more about the
asset claus which I strongly encourage people to look at
because you will find that there are many managers who
have these long track records of success. They wouldn't have
(15:49):
the brand names that you might see in the big
end of town because you haven't you know, they haven't
been prominent. They've just been doing what they've been doing
for a long period of time, and now the results
that they do liver for investors are coming to light,
and I think that's why you see much more press
around it. But it is not new, Okay, it is
(16:09):
lending to companies, It's been around for a long time
and the industry itself has been around for a long time.
It's just you haven't seen it in Australia, Enna, and
I think it's really important for people to look at
as a point of diversification.
Speaker 2 (16:23):
Fantastic, Neimaya, thank you so much for your time. Yes,
it's a pleasure. Thank you, Thank you for listening to
this episode. Until next I'm Michelle Baltasar Bye for now.
Speaker 1 (16:35):
Thanks for listening to the Friends with Money podcast. For credible,
independent and easy to understand financial commentary, visit moneymag dot
com dot au. Please remember that the views and opinions
expressed in this podcast are general in nature, and further
independent advice and research based on your personal circumstances should
(16:56):
be sought before making an investment decision.
Welcome to the Friends with Money podcast, brought to you
by Money Magazine, creating financial freedom for Australians since nineteen
ninety nine.
Speaker 2 (00:12):
Welcome to Friends with Money. I'm your host, Michelle Baltazar,
editor in chief of Money Magazine. Thanks for joining us.
The market whiplash in the last two months due to
Trump's on again, off again tariff since April has unnerved
many share market investors and it reinforced the value of diversification,
particularly across fixed income. In today's episode, we're going to
(00:36):
talk about one type of fixed income called global private credit,
and joining us is Leemiah Richardson, chief executive and Managing
director at Pengana Miamayah. Thanks for joining us.
Speaker 3 (00:49):
Yes, thank you for having me, Michelle. Pleasure to be
here today.
Speaker 2 (00:52):
So let's get to the first and fundamental question.
Speaker 4 (00:56):
What is global private credit.
Speaker 3 (00:58):
So when we referred to global private credit, we are
talking about the US and European markets, okay, So we're
not talking about Australia or we're talking about US and
Europe Okay. I think is critical and that's because in
those markets, this is a very large, mature market that's
been growing very quickly, been around for twenty five years
(01:20):
with many managers who have proven track coursers of success
in it. So what is it? It is lending to
companies predominantly, and it's where banks have exited lending in
these spaces. So about eighty five percent of a lot
of these corporate segments that our managers invest in provide.
(01:40):
Eighty five percent of lending to those segments is done
by profit credit managers, so professional credit managers, and fifteen
percent by banks, and that continues to continues to grow.
So it provides really attractive investment characteristics to investors off
the back of lending to very defensive, non cyclical companies
(02:03):
in those jurisdictions.
Speaker 2 (02:05):
So investors understand the kind of rates they would get
from term deposits, for example, or from banks where it's
the savings rate of anywhere between two and four percent.
So why should they look at global private credit what
would be the interest rate profile?
Speaker 3 (02:22):
Yes, So what you'll find is that there's feeling things
that are important there. Number one is it's contractual income
and it's floating rate, so it's a fixed spread over
the cash, right, okay, and so moves with interest rates.
So what's really nice about that is an inflationary environment
where the cash right goes up, you're actually protected because
(02:43):
it's a fixed percentage above a cash right right. So
for example, we have a one year term account just
part of one of our products that offers three percent
over the RBA cash right. You know, we have other
products that offer different types of spreads. But that's really
a consequence of fund managers who will make a loan
(03:04):
to a company and they will hold it until it's
paid back in full, and as a result of that,
you tend to get they call it an illiquidity premium,
but you tend to get anywhere between, you know, sort
of a percent to two percent sort of premium for
the fact that they're holding them to maturity. They are
not trading them out in the market and getting a
(03:26):
fee for that. They actually want to get paid back,
and as a result, you have this what they call
illoquidity premium attached to it. And that's why the interest
rates are really attractive relative to the risk that you
know that has taken on any individual loan.
Speaker 2 (03:42):
You mentioned earlier that you are not a bank, and
I think this is important for investors who have invested
in say a savings account or a fixed term deposit
that is guaranteed by the government, So that's up to
two hundred and fifty thousand with a bank is guaranteed
by the government in case of something happening to the market,
(04:05):
for example. So how can people or investors be protected
when they invest in something that is not provided by
a bank.
Speaker 3 (04:14):
Yes, so there's a number of different things that allow
you to mitigate the risk, okay in this So Number one,
it comes down to the manager and how they invest.
So how selective are they? So your top managers in
the space in the US and Europe very selective about
who they lend the money to, okay, And that's why
it's to defensive industries, non cyclical industries, kind of boring
(04:38):
cash flows, healthcare, business services, software, very stable industries with
market leading companies. Number two senior secured. So what that
means is you're investing at the top of the capital
structure at a low loan to value ratio, typically between
thirty and fifty percent. You have priority of income payment,
(05:00):
have security to get paid back, and you have priority
of getting paid back before anybody else does should the
company run into trouble. Number three widely diversified portfolios, Okay,
so any one, any one loans. For example, our portfolio
that we invest in has over two thousand individual loans
across twenty managers, because we're trying to eliminate any idiosyncratic risk,
(05:24):
any single name risk, single manager risks, single loan risk,
so that if one was to underperform or one loan
was to go into loss, it would have no real
impact on the overall return in the portfolio. So it's
those types of disciplines that actually helped to support the
credit profile. And that's really you know, kind of different
(05:45):
layers of defense, if you will, for investors to feel
comfortable investing in the asset class.
Speaker 4 (05:51):
Definitely no junk bonds. I know that's good.
Speaker 2 (05:56):
So I think a lot of our listeners understand local
private credit, where we're talking about companies that they're familiar with,
whether it's corporate credit through a top two hundred company,
or it's just understanding how businesses work and they need
to borrow money either from a bank or a non bank.
(06:17):
But tell me why it's important for investors to consider
not just local private credit, which they know, but global
private credit, where arguably we don't really understand how businesses work. Overseas.
Speaker 3 (06:30):
Yeah, so a couple of things there. So, so firstly,
just to touch on assie private credit, if you look
at the structure of our market, about ninety percent of
all lending is done by banks. Ten percent is done
by private credit, okay, and so it's actually you know,
quite a small subset of the overall lending market, which
is which is why it's it's it's really concentrated predominantly
(06:52):
in commercial property, but also you know in as subordinated
positions in asset back vehicles, and you'll see it in
kind of widely syndicated loans for big pe deals. That's
those that's where it's really concentrated. You know, there's there's
a tail, but that's predominantly what you get. And if
you look overseas, what you'll find is it's sort of
(07:12):
the exact opposite. So you have big sections of the market,
so companies that are you know, sort of a billion
plus and size that really aren't serviced by the banks anymore.
Eighty five percent of that market is banked by profit
credit providers and the balance by banks. And they used
to be companies that were bank that were on the
(07:33):
bank balance sheet, but since the GFC because of regulatory
changes in the US and Europe right, banks don't have
an incentive to lend to them anymore. Okay, because in
the European and US markets that were really hit hard
by the GFC, the regulators really don't want banks holding
long term assets funded by short term deposits. So it's
(07:56):
about the liquidity mismatch. And so as a result, you
have a lot of these great companies, great market positions.
Banks would love to lend them, but they have to
hold too much capital against them, so the returns aren't
as attractive as where else they could deploy their capital.
As a result, you have private credit providers who raise
institutional funds and now increasingly you know funds from retail
(08:19):
investors that are used as the funds that are then
lent to these companies. So it's interesting because if you
go to those markets, the US and Europe, it's much
more widely known and much more widely understood. And the
analogy I like to use here is I remember, you know, say,
if you look back twenty five years ago here in
(08:41):
equity portfolios, it was domestic equities. And yes, broadly speaking,
people wouldn't do global equities.
Speaker 4 (08:47):
No, not at all.
Speaker 2 (08:48):
We were all about our dividend generating shares.
Speaker 4 (08:52):
Yes, precisely.
Speaker 3 (08:54):
Right now, how many portfolios today and if you have
someone professionally constructing your portfol or an advisor managing your
portfolio would tell you it should all be in domestic
equities and not in global equities. Wouldn't happen And I'd
say the same thing. You know, the industry in the
US and Europe's been around over twenty years. It's much
more accepted and understood because the opportunity has been available.
(09:20):
It's now become available here. And I feel like it'll
end up you fast forward five years time, you'll end
up in the same position that we did with equities. See,
it'll be a staple as part of a broad portfolio.
It'll be a staple allocation because of these attractive characteristics.
Speaker 4 (09:35):
I'll tell you what.
Speaker 2 (09:35):
We will have this interview again in twenty thirty and
we'll see what the split.
Speaker 1 (09:41):
Is.
Speaker 4 (09:41):
But you are quite right.
Speaker 2 (09:44):
I remember covering Aussie shares versus global shares allocation two
decades ago and it was like, no, we don't want
any of the global shares.
Speaker 4 (09:53):
We're happy with local shares.
Speaker 2 (09:56):
But I just want to point out again that the
statistic from the IM that global private credit assets under
management have quadrupled over the past decade to US two
point one trillion. So what are the latest innovations in
this space?
Speaker 3 (10:12):
Yeah, so I think the single biggest innovation, I would
say is retail investors getting access to what has been
an asset class at only institutional investors could access, like
the future funder industry superfunds. And that's just because there's
been some significant barriers or obstacles for retail investors to
be able to access it. And I think people like us,
like the Pangana Credit Group, have overcome a lot of
(10:35):
those obstacles to make it very easy for a retail
investor to get access to top rating managers on a
highly diversified basis.
Speaker 2 (10:43):
So let's say one of our listeners is saying, I'm
close to retirement, I'm now thinking of shifting some of
my investments in SCHZ to now more fixed income or
something that provides a steady income. I know that Pandana
partnered with Merca to create this product called term plus,
(11:03):
So how would you describe that, Like, what is the
minimum investment and what are the three key features of
term plus, bearing in mind that a lot of our
listeners are probably thinking term plus is at a term deposit.
Speaker 3 (11:17):
So the first and very important to say we are
not a bank, okay, But what we've done is, like
I said earlier about global profit credit, global profit credit
is professional managers who provide lending to defensive companies on
a secured basis. Okay. So basically what you have is
(11:38):
we've built one, two and five year term products. So
for by Wave example, a one year product is RBA,
so it's fixed against US a fixed percentage above the
RBA cash. Right. So our one year product, for example,
is RBA plus three percent, so as the RBA price moves,
we will pay three percent over the RBA, right. And
(12:00):
where that really comes from is when you invest in
our funds. What we do is we invest in our portfolio.
Our portfolio has twenty one managers across the US and
highly diversified, so twenty one funds across the US and
Europe over two thousand individual loans, so there's no concentration,
there's not one single loan will make a difference to
(12:22):
the overall portfolio. And it's it's as diverse as possible
to kind of minimize any type of concentration risk, so
that one dollar sort of gets split across two thousand
plus loans provides you with stable monthly income that's annualized
RBA plus three percent, for example on our one year product.
The other things that we've done is we invest for
(12:45):
every dollar we get from an investor, we invest five
cents of our own capital, okay. And what that is
there for is really to do two things. It's really
to help to protect support the income payments, and it's
also there to support repayment of capital. So very simplistically,
(13:06):
we do not get paid income on our capital until
every one of our vestors, of our investors across our
term accounts gets paid. And so it's always that the
investor gets paid first, and then at maturity, if for
whatever reason there was an impairment in the fund that
meant you couldn't get your capital back, we basically will
(13:27):
use our capital to support to ensure that we can
provide some capital support to getting that dollar back for you, okay.
So it's really building in some additional protections over and
above the protections that come from the way that our
managers invest. The wide diversification in the portfolio, the security
(13:48):
that sits behind all of these loans. Okay, so we
feel really proud of having introduced that innovation into the
product to really make this accessible at a minimum two
thousand dollars investor and a very sort of defensive, defensive investment.
Speaker 2 (14:05):
Which I think is quite relevant and timely right now,
where geopolitics is truly doing a recalibration or reset of
the markets, and how do we value shairs and is
it going to be a recession or not a recession
and all of that. There's definitely a lot to unpack there.
(14:25):
But as I mentioned earlier, this is a two point
one trillion dollar asset class, so it's quite hard to
ignore it and it's set to just keep growing bigger.
Nea maya any other words of advice to our listeners, Yes.
Speaker 3 (14:42):
I think Number one, it's a must for investors to
look at this asset class, and the reason being whilst
you have lots of different investments you can do in Australia,
this is a very mature, it's been around a very
long time, mature diversified asset class, done very professionally with
long track records of performance. Number one. Number two in
(15:04):
an environment where geopolitically from a risk volatility perspective, and
equity markets and traded credit markets. You know, I think
the need for defensive, income oriented assets is critical that
do not trade, that are very well managed then provide
stability of return, particularly when you think about the demographic
(15:26):
challenges that we face with aging population as you go
into retirement. It is a must for that reason. It's
a must look and there's many resources that you can
that you can find online to learn more about the
asset claus which I strongly encourage people to look at
because you will find that there are many managers who
have these long track records of success. They wouldn't have
(15:49):
the brand names that you might see in the big
end of town because you haven't you know, they haven't
been prominent. They've just been doing what they've been doing
for a long period of time, and now the results
that they do liver for investors are coming to light,
and I think that's why you see much more press
around it. But it is not new, Okay, it is
(16:09):
lending to companies, It's been around for a long time
and the industry itself has been around for a long time.
It's just you haven't seen it in Australia, Enna, and
I think it's really important for people to look at
as a point of diversification.
Speaker 2 (16:23):
Fantastic, Neimaya, thank you so much for your time. Yes,
it's a pleasure. Thank you, Thank you for listening to
this episode. Until next I'm Michelle Baltasar Bye for now.
Speaker 1 (16:35):
Thanks for listening to the Friends with Money podcast. For credible,
independent and easy to understand financial commentary, visit moneymag dot
com dot au. Please remember that the views and opinions
expressed in this podcast are general in nature, and further
independent advice and research based on your personal circumstances should
(16:56):
be sought before making an investment decision.
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