Metrics committed to transparency, delivering returns for investors

Please note, this interview was filmed Wednesday 12 March 2025

There has been a lot of coverage of the private credit space lately, following on from the release of the ASIC discussion paper into public and private markets.

Whenever any part of the financial sector is growing rapidly and attracting new entrants, the ride can be bumpy and the regulator is right to monitor markets.

Metrics Credit Partners’ Managing Partner, Andrew Lockhart, shares that Metrics has already begun providing more information and greater transparency for investors. Metrics releases extensive details on its investments, providing insight into risk settings, credit quality, and loan pricing.

"If investors are more informed, then hopefully they can make better investment decisions," Lockhart stated.

Of the recent coverage of the space, Lockhart acknowledged that the fear campaigns seen in private markets are often due to a lack of publicly available data.

"It’s very easy in private markets sometimes for people to run a bit of a fear campaign. They don’t really know the ins and outs and the detail," he remarked.

By releasing more data, Metrics aims to alleviate concerns and build investor confidence. Against this backdrop, I spoke to Lockhart as part of Livewire’s 2025 Listed Series. We discussed the regulatory environment but also the opportunities Metrics is pursuing and how it goes about mitigating risks.

The highlights of our conversation are summarised below but for the full experience, make sure to watch the video.

Strong demand for private credit

The private credit market has seen a surge in investor interest, particularly in real estate-related credit funds.

"We've seen very strong investor interest across our various funds," Lockhart noted.

This demand comes from domestic institutional investors, private wealth clients, and a growing number of offshore institutional investors seeking exposure to Australian real estate.

A key factor behind this shift is the reassessment of risk in traditional real estate investments. Investors who previously favoured real estate investment trusts (REITs) or direct property ownership, particularly in the commercial office sector, are now pivoting toward debt investments.

"They've looked to lower their weightings in real estate equity and move to the lower-risk part of the capital structure in debt," Lockhart explained.

Origination and deployment of capital

One of the challenges in private credit is not just demand but also the ability to find suitable investment opportunities. Lockhart emphasised Metrics Credit Partners' investment in origination, which allows them to access high-quality lending opportunities.

"We now have over 170 people in our team, and a significant part of that ability to attract opportunities to lend really comes from the networks and relationships that our team have," he stated.

As the firm grows, larger-scale borrowers seeking financing for substantial projects increasingly turn to Metrics, assured of its financial capacity.

"The confidence of a borrower in the lender’s capacity to meet their obligations is really important," Lockhart noted, highlighting the firm’s ability to fund projects from inception to completion without liquidity concerns.

Transparency and regulatory scrutiny

In an industry where transparency can be limited, Metrics Credit Partners has taken a proactive approach. The firm releases extensive details on its investments, providing insight into risk settings, credit quality, and loan pricing.

"If investors are more informed, then hopefully they can make better investment decisions," Lockhart stated.

While maintaining borrower confidentiality is critical, providing transparency helps investors better understand the risks involved. Lockhart acknowledged the fear campaigns often seen in private markets are due to a lack of publicly available data.

"They don't really know the ins and outs and the detail, don't know the covenants, don't know the pricing, don't know the level of risk that a lender is taking. 

And so the ability to share some of that information with investors is designed to inform the market more effectively than we had previously". 

Distressed assets and investment opportunities

The private credit market has faced scrutiny over lenders taking control of distressed assets. While Lockhart did not delve into specific cases, he acknowledged the potential for business opportunities.

"We primarily established a business that was providing investors with access to the debt part of the capital structure. But since 2018, we've brought funds to market where investors can gain access to different parts of the capital structure," he explained.

These investments may include mezzanine debt, preferred or ordinary equity, or other convertible instruments.

"It is appropriate that some of it should be provided only by way of debt, but there are other opportunities for us to participate in providing equity," Lockhart noted.

This diversification enables Metrics to maximise returns for investors, whether through planning approvals, joint ventures, or asset sales.

Metrics Real Estate Multi-Strategy Fund (MRE)(1)

One of Metrics' standout offerings is the Metrics Real Estate Multi-Strategy Fund (MRE). Launched just four months ago, the fund already boasts over 140 assets.

"Fifty percent of investors’ capital through MRE is focused on the lower-risk, predominantly senior secured, first registered mortgage debt and the income that generates from that," Lockhart explained.

The remaining 50% is invested in real estate equity, offering exposure to large-scale residential and industrial development projects.

"Investors today gain exposure to 12 large-scale private property development transactions," he added.

This balance between debt and equity allows investors to benefit from stable income while also tapping into potential capital appreciation.

Diversification and risk management

The projects within MRE span different geographies and development stages.

"The 12 investments we have are all really playing to that theme around strong demand for residential property, high-density apartments, or land subdivisions," Lockhart said.

The fundamentals of the Australian property market remain strong, according to Lockhart, with increasing housing demand, low unemployment, and easing interest rates.

He adds that there remains a supportive policy environment, particularly in New South Wales, where planning approvals are being expedited.

"The government has been very positive and favourable around expediting planning outcomes," says Lockhart.

Selective investment approach

When it comes to selecting investments, Metrics takes a disciplined approach.

"We are across a very broad range of opportunities in the market. Our clients are active, and we see far more transactions than transactions that we complete," Lockhart said.

Rather than deploying capital indiscriminately, the firm focuses on the best risk-adjusted opportunities available – a position that it is afforded because of the relationships it has developed and the scale it has reached.

"The opportunity set far exceeds the available capital, which means that we’re able to really align the interests of our investors with the interests of the joint venture partner developer," Lockhart concluded.

With the private credit market undergoing significant and necessary changes amid increasing investor interest and regulatory scrutiny, Metrics appears to be well-positioned to meet the challenges.

And while nobody can guarantee the future path of any market or asset class, having an extensive pipeline of opportunities, a strong investor base, and leaning into increased regulation provide for solid foundations. 

LIT

Metrics Real Estate Multi-Strategy Fund (Fund)(1) (MRE)

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