Does a slowing economy increase the risk of loan defaults in private debt?

Well-run private debt funds use rigorous scenario testing and real-time monitoring to mitigate risks. Historical net write-offs by banks peaked at just 0.68% during the GFC and were 0.04% in September 2024, demonstrating strong resilience across economic cycles.

Does a loan default always result in a credit loss?

No. Private debt investors are protected by their seniority in the capital structure. Senior debt holders get repaid first, before subordinated debt, preferred equity, and common shareholders. Covenants and controls act as early warning signals allowing lenders to engage with borrowers to mitigate financial loss.

Are all private debt managers the same?

No. Private debt managers differ significantly in scale, credit skills, and experience. Quality managers need sizable assets under management, bank-level credit skills, extensive networks, and the ability to directly originate and diversify loans across borrowers to achieve optimal outcomes.

Does commercial real estate debt put capital at risk in a property downturn?

Property owners face greater risk than lenders. With typical loan-to-value ratios of 60%, owners' equity acts as a buffer. Even if property values fall significantly, lenders can compel borrowers to restore their position or pursue asset sales to maximize recovery without necessarily incurring losses.

Are non-bank lenders lenders of last resort?

No. Competent private debt managers lend to quality companies and often compete with banks or work alongside them in lending syndicates. Post-GFC regulations requiring banks to hold more capital have created financing gaps that private debt fills for established companies with sound fundamentals.

Metrics named Real Estate Debt Manager of the Year

Metrics Credit Partners (Metrics) has been named the winner of the Real Estate Debt Manager of the Year: Asia-Pacific at the Private Debt Investor (PDI) Global Awards 2024.

The PDI Global Awards celebrate excellence in the private debt industry, recognising outstanding achievements across Asia-Pacific, Europe and the Americas. These awards consider both qualitative and quantitative criteria, including innovation, deal size, and strategic significance.

Andrew Lockhart, Managing Partner at Metrics Credit Partners, said, “Receiving this PDI Global Award is a testament to the efforts and commitment of our team, and we are honoured by this recognition.”

This win reinforces Metrics’ position as a leading Australian-based alternative asset manager. Metrics has an experienced team of over 160 investment professionals with current assets under management of approximately $23 billion.

Mr. Lockhart concluded, “Our significant investments in the commercial real estate sector positions us as a leading private credit investor across the Asia-Pacific region, providing unparalleled access to investment opportunities. At Metrics, we are entirely focused on providing a high level of service to our clients. We are a reliable and consistent partner providing access to non-bank finance for our borrower clients and ensuring we carefully manage risk and deliver great investment outcomes for our investors. We thank our clients for the opportunity to assist.”

Read full announcement on the Private Debt Investor website.

2024 PDI Awards | 1 March 2025

Metrics Credit Partners Pty Ltd ABN 27 159 646 996 AFSL 416 146 (Metrics) makes no representation or warranty with respect to the accuracy, completeness or currency of the content. The content is for educational purposes only and is not intended to provide you with financial advice. It has been prepared without taking into account your objectives, financial situation or needs. Independent advice should be obtained from an Australian financial services licensee before making investment decisions. To the extent permitted by law, Metrics excludes all liability for any loss or damage arising in any way due to or in connection with the publication of this content, including by way of negligence. Past performance is not an indicator of future performance. All investments contain risk and may lose value. For further information, see PDI’s guidance on nominations: https://www.privatedebtinvestor.com/pdi-global-awards-2024-guidance-on-nominations/

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