Join the trend of investors transitioning their portfolios toward private credit
Private credit presents a compelling opportunity for investors seeking stable returns and diversification beyond traditional public markets. As an asset class, private credit offers unique advantages, allowing investors to enjoy competitive fixed rates of return by becoming lenders to non-bank investment organisations like Azzet Private.
“Private credit has an attractive risk-return trade-off for some investors. It pays a relatively high interest rate – generating higher returns than other similar assets such as leveraged loans – and to date has exhibited low volatility relative to publicly traded assets, like corporate bonds”
Reserve Bank of Australia, October 2024
Where the wealthy are investing
According to the International Monetary Fund (IMF), global private credit assets under management have quadrupled over the past decade to US$2.1 trillion in 2023. This exponential growth is reflective of the benefits savvy investors have seen by transitioning their portfolios to private credit.
This increase is largely due to the demand from businesses which is unable to be serviced by banks due to lending regulations, leaving a multi-trillion dollar opportunity for private investors to earn strong yield on their capital by becoming financiers.
What clients are looking for
At Azzet Private, we recognise that private credit provides a powerful blend of income potential and resilience, with lower correlation to the volatility of public equities. This makes it a popular solution for investors looking for steady returns and capital stability.
Our private credit opportunities are designed to align with the needs of discerning investors who are seeking a place to deposit their capital in exchange for a competitive fixed rate of return.
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Common features
Typical features of private credit include:
Fixed Returns - A fixed interest rate for the life of your facility
Capital Stable - Fixed face value, low volatility instrument
Monthly Income - Popular for clients seeking regular income payments
These features are characteristic of debt instruments and they resemble those of bank products such as savings accounts, transaction accounts and term deposits which are similarly debt instruments, though ones that typically offer a lower rate of return.
Private credit carries with it an increased level of risk when compared to term deposits and other similar bank-issued products, though this is compensated for in the form of higher interest rates offered by providers of private credit opportunities.
Common alternatives
Investors considering private credit will typically be considering a range of options including:
- Savings accounts
- Term deposits
- Government bonds
- Corporate bonds
- Mortgage funds
- Notes
With the exception of mortgage funds (which typically offer variable returns), these fixed interest investments are popular ways to build wealth.
RateWise which is offered by Azzet Private is a popular alternative to the above products because clients like the fact they can become a direct lender to Azzet. Our private credit opportunities offer terms of 3, 6, 12, 36, 60 and 120 months for discerning clients seeking a strong fixed yield on their capital.
Contact us to learn more and speak with one of our consultants about how you can enjoy the benefits of private credit.