Private credit secondaries could be the next frontier for the booming asset class in Australia as the local sector matures and institutional investors seek more flexibility.
While secondaries are common in private equity (where funds sell equity stakes in private companies to other funds rather than taking them public) and in venture capital (where early startup investors and employees sell shares to new investors) the market is not yet developed in Australian private credit.
But this could soon change.
PGIM head of European private credit Josh Shipley said secondaries were a natural progression for the asset class, and in other markets such as the US and Europe the secondary market has more than doubled over the past two years with institutional investors in private credit funds, and the managers of the funds themselves all seeking access to liquidity.
“This market has grown at least twofold in the past 12 to 24 months. You’ve seen new funds form, you’ve seen a lot of key asset managers entering into it, and I think it’s the natural progression of private credit going from USD1 trillion [$1.42 trillion] to USD2 trillion,” Shipley told Capital Brief.