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 solidifies market position with new appointments

Metrics Credit Partners has announced new appointments within its Investments Team, as the business cements its position as Australia’s leading non-bank corporate lender.

Mathew Fulton and Marc Hurwitz have been appointed as Investment Directors based in Sydney covering corporate origination. Both join from Investec Australia’s Corporate and Acquisition Finance (CAF) team, following Metrics’ successful acquisition of Investec’s CAF loan portfolio in March this year.

Charles Tandy has also been appointed as an Investment Director, focusing on commercial real estate (CRE) asset origination.

Metrics Managing Partner, Andrew Lockhart, said: “We are very pleased to have Mathew, Marc and Charles on board. All three bring extensive industry experience and position us well for continued growth.”

“The Investec portfolio acquisition has been a great outcome for investors, as it has added to the diversity and liquidity across our funds, and expanded our relationship with Australian corporate borrowers,” Mr Lockhart said.

Mr Hurwitz has over 20 years of diversified experience in banking and funds management in both the Australian and European markets. Mr Hurwitz was part of Investec’s Corporate and Acquisition Finance team for over 11 years. Prior to this, he held roles at Ellerston Capital, EIM and Goldman Sachs. Mr Hurwitz joins Metrics today.

Mr Fulton has 18 years’ experience across the Australian and European debt markets. Prior to joining Investec, he worked at Commonwealth Bank of Australia as Head of Middle Market Private Equity Lending, and as Vice President – Credit Analyst, Proprietary Credit Trading at Deutsche Bank in London. Mr Fulton joined Metrics in mid-April.

Mr Tandy brings over 13 years’ experience and was previously at ANZ, as an Associate Director and Relationship Manager within the Institutional Property Group. Mr Tandy joined Metrics in mid-April.

The latest appointments build on several appointments announced in March.

9 June 2021

For further coverage on this announcement, see below:

Financial Standard, 9 June 2021 – Metrics adds three investment directors

Money Management, 9 June 2021 – Metrics appoints three investment directors

Sydney News Today, 9 June 2021 – Metrics appoints three investment directors

Industry Moves, 9 June 2021 – Metrics adds investment director

Industry Moves, 9 June 2021 – Metrics expands corporate and acquisitions investments experience

Industry Moves, 9 June 2021 – Tandy joins Metrics

Advisor Voice, 10 June 2021 – Metrics solidifies market position with new appointments

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