Schroders Capital secures first Australian private debt mandate

Schroders Capital has been awarded its first Australian private debt mandate from a large industry superannuation fund.

The $250 million mandate would cover corporate, real estate and infrastructure debt, and was targeting a return of 4.5% over its benchmark, the Bloomberg AUSBOND Bank Bill index.

Schroders Capital had $103 billion of assets under management in private assets including $7.7 billion in infrastructure, $38.4 billion in real estate, and $25.4 billion in private debt and securitised credit (as at 31 December 2021).

Nicole Kidd, head of private debt, Australia, said the Australian private debt market, although still nascent, was emerging as a strong and attractive region for private debt investors.

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“We are seeing a great opportunity emerge in Australia in bringing together investors looking for attractive returns with borrowers looking for flexible capital,” she said.

“We also have access to Schroders’ global investment capability, bolstering our knowledge of local private markets and providing valuable additional information when making investment decisions.

“Our investment team covers the full spectrum of private debt across corporate, real estate, infrastructure; spanning senior, subordinated and untrenched. By leveraging this access to information, and our worldwide network, we can offer customised entry points into the asset class for clients.”

Chief executive of Schroders Australia, Sam Hallinan, said that institutional investors were increasingly looking to private debt to access diversified returns, and the team had experienced strong interest in this strategy.

“This is not surprising as there are some key advantages of investing in private debt for superannuation funds,” he said.

“Superannuation funds are becoming increasingly complex, dealing with more challenging paradigms, such as Your Future, Your Super, and the ability to leverage relationships with key managers is becoming ever more important to them. 

“We see this partnership approach with our institutional clients as paramount, particularly in private assets where investment skill, experience, and the ability to move quickly is critical. “