Private credit portfolio allocations remain popular among SMSF members, but a fund manager operating in the space has recognised more education is required for all investors interested in the asset class.
Zagga has noted SMSFs and high net worth individuals account for over 50 per cent of its assets under management, but also recognised more educational work is required to ensure individuals properly understand the risks and opportunities these types of investments present.
“Private credit can offer investors significant upside with stable income, attractive risk-adjusted returns and uncorrelated portfolio diversification. As macro headwinds intensify and fiscal policy tightens, this appeal has seen more investors – from institutions to individuals – drawn to the asset class,” Zagga chief executive and co-founder Alan Greenstein explained.
“Yet, not every investor has the experience or expertise to understand the complexities of private credit and the vast and varied opportunities within it.
“For example, US corporate credit carries a significantly different risk profile to Australian real estate private credit. We have seen global investors caught unaware by this, with the current rhetoric around gating and liquidity highlighting the need for more investor education.”
To this end, Zagga has released an educational white paper series, with the first resource item called “Opportunity through uncertainty”. It examines certain topics including the importance of governance and risk management for people considering an investment in private credit and why Australia continues to attract attention in the space.
“We know returns are just part of the story. As the opportunity evolves, investors rely on us as trusted experts to help them understand and access quality Australian real estate private credit opportunities in a way that best suits their risk appetite,” Greenstein said.
“This white paper series aims to complement our existing investor resources and affirm our unwavering commitment to transparency, trust and partnership – values our business was founded upon.”
Darin Tyson-Chan
Editor
Darin is the founder and publisher of Benchmark Media, an independent publishing house whose mastheads include financialobserver, selfmanagedsuper and smstrusteenews. He has been covering the financial services space for over a decade and in this time he has worked for a variety of trade publications. Darin has also written for the Money section published in The Sydney Morning Herald and The Age.
Articles by Darin