As featured in The Sydney Morning Herald. View the original article here.
Australia’s private credit market has long focused on lending in sectors where banks have traditionally been less active, such as commercial property, development finance and asset-backed lending. In recent years, the sector has faced increased scrutiny from the Australian Securities and Investments Commission (ASIC), which has raised concerns about governance and disclosure practices and warned that further intervention may follow if standards do not improve.
This increased oversight, combined with broader market caution, has prompted investors to explore new opportunities. One of these is global private credit, an asset class that, according to global investment consultant Mercer, has grown to more than US$1.6 trillion worldwide, driven by pension funds, insurers and sovereign investors.
Pengana Credit CEO Nehemiah Richardson says Australian investors are increasingly exploring global private credit as a potential diversifier offering broader sector and geographic exposure. “Offshore markets are larger, more diversified and operate under long-established institutional frameworks,” he says.
Why global private credit matters
Global private credit involves direct lending to mid-sized companies — typically in the United States and Europe — across sectors such as healthcare, technology, logistics and infrastructure. These loans are usually senior-secured and held to maturity, providing lenders with first-rank rights over assets and cash flow.
Richardson says global private credit strategies aim to generate consistent income while managing downside risk through diversification and governance. “Unlike many Australian private credit portfolios, which are heavily weighted to property, global private credit spans multiple industries,” he says. “Managers typically apply rigorous underwriting and protective covenants designed to balance income generation with capital protection.”
Recent innovations and technology are democratising access
ASX-listed Pengana Capital Group, in association with Mercer, has developed an income-focused fixed-term investment platform called TermPlus, designed to give Australian investors access to global private credit through a professionally managed, multi-manager portfolio.
Richardson says TermPlus is designed to provide exposure to a Mercer-curated portfolio of more than 3500 underlying global private credit loans diversified by region, borrower and strategy. “Our focus is on democratising access,” he says. “Through Mercer’s due-diligence framework and our portfolio construction, we aim to connect Australian investors with institutional-quality global private credit opportunities that were previously difficult to reach.”
How the TermPlus product is structured
Richardson says TermPlus targets monthly distributions linked to the Reserve Bank of Australia (RBA) cash rate, plus a fixed spread that varies by term length. These targets are objectives only, and while Pengana has put in place a highly diversified curated portfolio, as well as built-in layers of account protections, underpinned by its own co-investment alongside TermPlus account holders, capital is not guaranteed. “TermPlus aims to provide regular income by accessing diversified global credit exposures, allowing investors to diversify their income strategies,” he explains.
A disciplined approach
The association with global investment leader Mercer provides oversight at each stage of the process, from manager selection to ongoing monitoring. Mercer’s global team evaluates factors such as default history, recovery rates, and portfolio concentration to maintain institutional standards.
“This collaboration allows us to build a diversified portfolio across thousands of underlying loans,” Richardson says. “It’s about professionalising access to global private credit for Australian investors in a transparent, regulated way.”
Looking ahead
Richardson says global private credit could complement diversified portfolios, particularly for investors looking to broaden their income sources. “Our role is to provide researched access to global managers within a governance structure that investors can understand and trust — all through an easy-to-access online account,” he says.
Sponsored by TermPlus For more information, visit termplus.com.au.
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Information only. Not financial advice. Consider your circumstances and read relevant disclosures and PDS available on the TermPlus website before making investment decisions.
