Navigating default cycles & why revolution seems unfazed | Bob Sahota

In today’s ROCast, Murdoch sits down with Bob Sahota, the Managing Director & CIO of Revolution Asset Management. Revolution provides wholesale investors access to a diversified portfolio of Australian and New Zealand Corporate Loans and Asset-Backed Securities.

The Fund currently has a total fund size of A$1,893.7m. The Underlying Fund holds a total of 47 loans as at 31 July 2023, with an average expected life of the portfolio being 1.3 years, Revolution seeks to outperform the RBA Cash Rate by 4 to 5 %p.a. the portfolio yield is 10.1% with a credit spread of the portfolio above BBSW of 584 basis points (bps). The average credit rating of the portfolio is BB+.

Bob gives his insight into their process and lending philosophy. Bob also outlines the private lending universe, the overall health of the loans in the portfolios and gives his thoughts on the outlook for lending in current markets.

I found the conversation on the state of the Australian economy quite insightful, in particular how corporate company loans are faring in comparison to commercial and residential property loans in a post-COVID, rising interest rate and lock down environment.

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