Pengana Credit has launched a separately managed account (SMA) fund, touted as Australia’s only diversified global private credit product, to meet rising demand among investors.
“Even high-net-worth investors previously struggled to gain meaningful exposure, but now any Australian retail investor can access the same diversification and returns enjoyed by institutional investors,” said Nehemiah Richardson, chief executive of Pengana Credit.
The launch comes at a time of exponential growth for the global private credit industry, which has nearly tripled in value over the last 10 years to US$1.5 trillion, with some forecasts suggesting the market could expand to US$2.8 trillion by 2028.
“Outside of Australia, global private credit is arguably the most highly sought-after asset class,” Richardson said, highlighting a “severe shortage” of applicable products available in the Australian non-institutional investment market.
In recent times, Pengana has been positioning itself as a leader in the global private credit market by partnering with Mercer and launching a range of investment vehicles. These offerings include the TermPlus online term accounts for retail investors, the listed Pengana Global Private Credit Trust (ASX: PCX), and the unlisted wholesale Pengana Diversified Private Credit Fund.
The firm’s new investment vehicles, according to Richardson, introduce a “radical level” of global private credit access for Australian investors.
However, the CEO warned investors to be selective in their exposures particularly as the sector gains more traction globally.
“It’s important to recognise that not all private credit investment are the same,” he said.
“Geography plays a big role as there are a number of differences between global private credit investments, and local Australian private credit.
“Global private credit is a huge market playing a major role in the US economy and many European economies.”
Locally, Richardson highlighted, private credit flourishes mostly in areas where banks do not have credit risk appetite, such as commercial property.
In a market note last month, Richardson urged for a clearer distinction between Australian and global private credit due to their differing risk and return profiles, noting that this clarity will help investors avoid comparing “apples with oranges” when evaluating allocations to this asset class.
For the CEO, the rapid growth of private credit reiterates how managers and investors need to stay disciplined.
“It’s likely we’ll see more variability in complexity and risk profile as more product enters the market,” he said.
