Peter Szekely, from Tanarra Credit Partners, joins ausbiz and shares his insights into the current state of private debt, highlighting it as an appealing prospect for investors due to enduring high rates. He anticipates these rates to persist for the next 12 to 18 months, mainly driven by the mid 5% Australian inflation and tight labour markets.
Looking at the global growth situation, he notes a marginally decreased risk of recession next year and believes Australia might still witness a growth of one and a half to two percent this year. Discussing the private debt market’s size, Peter says it ranges broadly from asset-backed structures to corporate credits. He sees increased opportunities due to the banks’ lending tendency. He emphasizes the potential impacts of medium-term elevated rates on corporates and consumers, stressing that these rates can squeeze margins and make operating conditions tougher.
In Australia, he notes a division of consumers into ‘haves’ and ‘have nots’ and mounting pressure from accruing credit card debt. Positioning for potential economic headwinds, Peter advocates private credit as a diversified product that provides a hedge against volatility seen in public markets. According to him, retail investors can access the private credit market through listed products and PDS via any wealth channel or financial planners.