Skip to main content

Private credit is becoming increasingly popular, offering investors the chance to achieve significant returns, far outweighing the public markets. One area that’s drawing a lot of interest is deal-by-deal investments. This approach gives investors more control over where their money is invested and can offer higher returns compared to traditional strategies. As the appeal of private credit continues to grow, more deal-by-deal opportunities are emerging, providing unique ways to enhance wealth.

Why Deal-by-Deal Investments Stand Out

Unlike traditional funds, where your money is pooled with other investors and you accept the fund’s investment strategy, deal-by-deal investments allow you to choose individual deals facilitated by the issuing firm. This gives you the freedom to evaluate each opportunity based on its merits and align decisions with your risk tolerance and investment goals. In asset-backed private credit, investors have access to valuation reports of the subject property, offering greater information and the ability to conduct due diligence before investing.

A significant advantage of this approach is the level of control you maintain throughout the loan’s duration. If a borrower fails to meet the stipulated loan conditions, investors can issue default notices and take steps to protect and maximise their investment. This control can mitigate ongoing risks and enhance overall return potential. Additionally, deal-by-deal investments often involve loans backed by tangible assets, such as real estate. This allows you to invest in assets you believe in and value, providing comfort and security not typically found in traditional investments.

Maximising Returns

In a deal-by-deal structure, there is a closer connection between the investor and borrower, requiring mutual agreement on the loan’s interest rates and terms. This direct engagement can lead to returns closely matching the borrower’s rate, maximising profit potential. Private credit firms facilitating these loans charge a small administration fee from loan repayments (typically called a NIM) for ongoing maintenance, yet investments still return 9-12% per annum, depending on the associated risks.

A Great Time to Invest

Deal-by-deal opportunities in private credit give you the chance to take more control of your portfolio, aim for higher returns, and diversify with asset-backed loans. Given the strong growth in the Australian property market, now is a great time to explore these opportunities and tap into this potentially lucrative investment avenue.

REAL PROPERTY SECURITY . ATTRACTIVE RETURNS . CAREFUL RISK ASSESSMENT