Secured Private Debt
We have all seen and read about the health and financial impact that COVID-19 has had on people, businesses, and the economy, not just in Australia but all over the world. This new environment has seen significant declines and uncertainty in traditional investments such as the share market and other traded securities. Many economists, academics, and bank analysts are expecting property values to decline as tenants struggle to pay their rents and more businesses close over the next few years.
lternative investment asset class that
is typically not correlated to the share
market or other traditional investments.
Investors in this asset typically benefit with a more stable investment that seeks to preserve capital while providing – in some cases significant – yield. So, what is this asset class? It is Secured Private Debt.
Investing in Secured Private Debt (or Secured Direct Lending) has traditionally been the exclusive domain of banks. Over the past 10 years, institutional investors such as superannuation funds, insurance companies, sovereign wealth funds and wealth management firms began investing in this asset class to diversify and protect their returns. Now there are several firms that offer individuals the opportunity to invest in this asset class.
Essentially, Secured Private Debt is an investment that exhibits the following qualities:
- Investors hold Security – A registered mortgage or security over real assets (e.g. property or business assets)
- Private investment – It is a direct loan contract that is not traded on a financial market. Hence the investment is not directly affected by market volatility that can be caused by negative sentiment and irrational fear from other investors
- Debt contract – A direct loan agreement with contractual returns. Unlike shareholders or property
investors, secured lenders are generally insulated against capital loss as debt is protected by the borrower’s equity contributions and profit expectations.
One of the pioneers of making secured private debt more available to individual investors is Wingate. Established in 2004, Wingate is a leading Australian private markets finance and investment house. Their success has been built
on their ethical approach, deep capabilities in debt and their capacity to inspire trust in their partners.
Owned by its principals and a group of substantial private and institutional investors, Wingate has so far funded more than $11 Billion of property value. It has successfully completed over 230 transactions spanning 15 years. Wingate has over 170 staff with offices in Melbourne and Sydney.
Its flagship fund, the Wingate Investment Partners Trust (WIP), was established more than 8 years ago and has currently in excess of $1 Billion in funds under management. The Fund has consistently paid steady income to its 1,500 plus investors. Wingate, its founders, staff, and shareholders have significant investment themselves in WIP, thus ensuring that there is always a strong alignment between Wingate and
all its co- investors.
WIP invests only in secured private debt and currently offers diversification across more than 60 individual loan contracts in the portfolio. Many of the fund’s loans are first ranking secured against Australian residential properties. Even under the current COVID-19 environment, Wingate is confident in its ability to continue to preserve investor capital and deliver high single digit returns.
Wingate has a dedicated Asia Desk that was established to extend its investment offering to the broader Asian ommunity, located both in Australia and overseas. This includes providing WIP investment collateral in Mandarin as well as the services of a dedicated team of experienced investment specialists who can assist with better understanding the Australian private debt investment market.
For further information, please contact Adrian Ting, Director & Head of Asia Desk at Wingate, 0428 187 799 or email to firstname.lastname@example.org for a confidential discussion about investing in Secured Private Debt. Alternatively, you can visit the www.wingate.com.au for more information.
Monthly Net Performance (%)
This table illustrates the consistency of historical WIP returns. Going forward, WIP targets high single digit returns.