Great risk-adjusted returns and diversification have drawn an increasing number of investors to private debt. Metrics Credit Partners (Metrics) has become a leading private debt provider in Australia with more than $13 billion under management across a suite of listed and unlisted managed funds that finance medium and large Australian companies. Metrics’ Managing Partner Andrew Lockhart discusses the risks and rewards of private debt for investors in this in-depth interview with Peter White from the Inside Adviser network.

You can watch the interview by clicking on the video player below.  

Topics discussed

0:40 – Introduction to private debt

2:05 – Why companies use non-bank financing

4:05 – How lenders limit risk

5:58 – How low interest rates affect the market

6:43 – How private lenders become relevant to banks and borrowers

7:32 – How investors access private debt funds

9:17 – Fixed rates versus floating rates

10:48 – Due diligence on borrowers

12:30 – Low default rates

13:57 – The growth of SMSF investors

15:35 – Private debt as a defensive investment

16:33 – Educating the market

17:29 – The importance of good corporate governance

18:18 – Investing in private debt versus equity

19:09 – Diversification of lending