Uncertainty weighed heavily on markets and generated extreme volatility across asset classes in 2022. Now with market headwinds shifting from soaring inflation and rising interest rates to recession fears, investors need to rethink their allocations as we enter unchartered territory.
With the challenging economic period ahead, this whitepaper explores the impacts of inflation, rising interest rates and widening credit spreads on the Australian and New Zealand private debt market. We discuss the specific characteristics of leveraged buyout loans, real estate debt and asset-backed securities - the sub-sectors of private debt that have demonstrated the ability to withstand multiple market cycles.
It is more important than ever to understand what's under the hood of a private debt allocation as the period ahead will see huge dispersion of performance of private debt funds, depending on the focus of the respective strategies.
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This information is for institutional and professional investors only and has been prepared by Revolution Asset Management Pty Ltd ACN 623 140 607 AFSL 507353 (‘Revolution’) who is the appointed investment manager of the Revolution Private Debt Fund I, the Revolution Private Debt Fund II and the Revolution Wholesale Private Debt Fund II (together ‘the Funds’). Channel Investment Management Limited ACN 163 234 240 AFSL 439007 (‘CIML’) is the Trustee and issuer of units for the Funds. Channel Capital Pty Ltd ACN 162 591 568 AR No. 001274413 (‘Channel’) provides investment infrastructure services to Revolution and Channel and is the holding company of CIML. None of CIML, Channel or Revolution, their officers, or employees make any representations or warranties, express or implied as to the accuracy, reliability or completeness of the information, including forecast information, contained in this document and nothing contained in this document is or shall be relied upon as a promise or representation, whether as to the past or the future. Past performance is not a reliable indication of future performance. All investments contain risk. This information is given in summary form and does not purport to be complete. To the extent that information in this document is considered advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling units in the Funds please note that it does not take into account your particular investment objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice. For further information and before investing, please read the relevant Information Memorandum available on request.