With high interest rates and inflation pushing up the cost of capital, it’s important to remember that not every asset class will feel the pain equally. Private debt can pose a distinct opportunity for investors as floating rates protect and can even add value in a rising rate environment, so is this a good time to be investing in private debt as we see signs of a terminal rate approaching?
Portfolio Manager, Lucie Bielczykova, CFA, SA FIN, believes the mounting appeal of private debt comes down to being an ‘all weather’ asset class, so long as investors remain defensive and invest into market leading businesses in non-cyclical sectors such as healthcare and mission critical software that are better insulated from inflationary pressures.
With investors continuing to avoid the turbulence of public markets by looking beyond traditional investment strategies in a slowing economy, an allocation to private debt can be especially attractive as it maintains strong risk-adjusted characteristics and provides reliable income through the cycle.
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.