Private credit is growing fast. How are you placed to take advantage?
Private credit is a rapidly growing asset class in Australia.
It is gaining market share as investors seek a defensive allocation and to diversify away from public market volatility, while delivering outstanding risk-adjusted returns in credit investments that are secured, collateralised or otherwise have strong downside protection features.
Through a series of four insights our Head of Credit Investments and Lending, Frank Danieli, introduces private credit, exploring the wide range of opportunities now available for Australian investors.
Global Credit Solutions at MA Financial
At MA Financial, we invest across a range of private credit market segments where we have genuine edge and differentiated expertise. We are focused on proprietary deal flow and finding lending opportunities where we can be a term and price setter.
As an aligned manager with substantial co-investment alongside our clients, we care deeply about risk management, consistency of returns and downside protection.
Our investment processes and robust governance frameworks are carefully designed with these objectives in mind.
In this video series two of our senior leaders – Joint CEO Chris Wyke and Head of Credit Investments and Lending Frank Danieli – provide transparency into our detailed and diligent approach to private credit investing explaining how and why it sets us apart.
Frank leads our Global Credit Solutions team which invests in diversified private credit in Australia and the US, including direct lending, asset-based finance and specialty credit.
Video 1: Art and science: our investment process
We have spent years designing and refining an investment process that allows us to lean into our core competencies, harness the talents of our people, unearth good ideas and try to mitigate avoidable mistakes. In this video, we provide an inside look at how our investment process works, what we focus on and what differentiates MA Financial’s approach to private credit.
Video 2: War Games: preparation matters
War Games is a unique feature of our investment process. It is our semi-annual portfolio stress testing exercise where we simulate three economic downturn scenarios – a moderate recession, severe recession and a financial crisis or depression - as well as other discrete risk scenarios on our portfolios. The purpose is to ensure, as fiduciaries, we are prepared with defensive steps to safeguard investor capital if or when a downturn occurs.
Video 3: Red Team: prevention is better than cure
The Red Team is one of the most important parts of our investment process. The role of the Red Team is to join the Investment Committee as a contrarian perspective when we're considering a new investment and challenge the investment team’s thesis after conducting their own independent research. The Red Team helps us ensure we make balanced and robust decisions on behalf of our investors.
Video 4: Game Day: the Investment Committee
The Investment Committee (IC) is the final stage of our investment process – where our investment and portfolio management teams recommend a proposed deal for inclusion into our funds. The IC consists of some of the most senior and experienced professionals within MA Financial who draw on their unique perspectives and experience to help us make good investment decisions. Debate at the IC is more than facts and numbers – it’s about understanding what you have to believe to make the investment, and how the investment can play out in the real world.
Video 5: Balancing the scales: why team setup matters
At MA Financial we believe the role of a portfolio manager in private credit is split into equal thirds – make great investments, construct your portfolio well, and prudently manage risk – and we’ve designed our team structure to account for this. We believe team structure is critical to deliver good investor outcomes through cycles.
2 topics