A growing number of older Australians are looking to break-up, often after long marriages, with women leading the charge. It’s a hard decision to make as it typically comes with financial difficulties and emotional trauma.
Energy and consumer cyclical sectors are the investment standouts, but finding fair value in the banking and utility sectors is much more problematic, an investment conference is told.
Self-funded retirees to benefit from private credit safety net
Seld-funded retirees who have ventured into the private credit market searching for yield can draw comfort from the fact that that the global ratings agency Moody’s and the index provider MSCI have created a first-of-its-kind solution to help assess risk for this investment class.
The combination of Moody’s flagship EDF-X credit risk modelling solutions with MSCI’s universe of private credit investment data will assist investors gauge private credit risk.
MSCI gets its private capital data from documents provided by asset managers, and its database includes figures on more than 2,800 private credit funds and more than 14,000 corporate borrowers globally.
“As the private credit market evolves, investors are looking for trusted independent assessments to help benchmark credit risk, inform their investments and monitor portfolios,” says Rob Fauber, Moody’s president and chief executive officer. “Our partnership with MSCI will play a critical role in providing these insights, helping market participants make informed decisions.”
The announcement could not be timelier in Australia, with Reserve Bank data showing business credit jumped 8.6 per cent in the year to March 31, 2025, up from 7.3 per cent a year ago.
“The global private credit industry, estimated at $US2.5 trillion ($3.9 trillion), was solidifying its role as a vital source of finance for businesses by offering faster loans with more flexible terms than traditional forms of business credit from banks,” says Simon Arraj (pictured), founder and responsible manager of Vado Private.
Strong demand for private credit
“In recent times, a tremendous amount of capital has been raised by alternative asset managers in Australia. The demand for private debt is strong. As the market expands, investors will benefit from independent assessments of credit risk, so the move by Moody’s and MSCI is welcomed.
“The need for consistent risk assessment tools will enable investors to better compare private credit investments and allow product providers to provide more transparent information about risk.”
Arraj says the demand for private credit is strong in Australia, fuelled by family offices looking for investment opportunities and by the instability in the stock market, which has led investors to seek less volatile options like corporate debt investments.
A new report, Australian Private Capital 2025 Yearbook from Preqin, a research house for the alternative assets industry, and the Australian Investment Council, reveals that global private credit managers are launching more funds targeting Australia’s private wealth investors and family offices, attracted to the floating-rate properties in a high-interest-rate environment.
Even with the current economic uncertainty, business lending is still growing strongly in 2025, as highlighted by Reserve Bank data. By contrast, home lending is growing more slowly at just 5.7 per cent to March 31, 2025.
According to the Yearbook, family offices accounted for 40 per cent of active private capital investors in 2024, up from 25 per cent in 2022 and just 10 per cent in 2020. The report also noted that superannuation funds are also significant allocators to private capital.
According to the Reserve Bank, the supply of private credit plays a small but growing role in servicing firms with specific financing needs. Recent defaults experienced by private credit investors “have been less frequent relative to other comparatively risky investments in the leveraged loan or high-yield bond markets,” the bank says.
