“Not a week goes by without someone pitching a private credit deal to Alvia Asset Partners Nathan Robertson. Increasingly Macquarie Group or Commonwealth Bank might be part of the pitch. Private credit/debt is booming, especially in property – MA Asset Management’s Drew Bowie reckons it will be essential for the housing crisis. So why the rush into a riskier class?
– Capital Brief Associate Editor, Andrew Cornell
While there’s been no shortage of private debt deals this past year, Alvia remains cautious about the quality and risks involved in many of these given the market’s rapid expansion.
Private debt, driven by the withdrawal of banks from non-core parts of the market and investors’ search for yield, is undeniably a hot topic. With assets expected to nearly double by 2028, it’s crucial to recognise that not all deals are equal.
Despite the hype, the investment team has been extremely selective in deploying capital, thoroughly vetting each opportunity to ensure it aligns with their capital preservation-first mindset.
“The pursuit of absolute returns, agnostic to sector, geography and listing, is really conducive to family offices and it aligns with how they think about their own investments, typically from operating businesses themselves. So we invest across both public and private markets,” Alvia Asset Partners CEO Nathan Robertson told Capital Brief.
“Every week we have a private debt manager trying to put a deal in front of us. And some of these things are great. But given how much product is available and the flood of capital that’s gone to that sector, I would be broadly concerned over the quality of some of the deals that are being done and the risk behind them.
“I think there’s a permanent place for private debt but we haven’t deployed capital in private debt for some time”.