The torching of private credit investors

Australia investors are slowly being torched by blindly following the blind into private credit funds or products.

Using the word ‘blind’, applies because I (we, us, them) don’t really know what’s inside and I don’t really think many investors have conducted their research and analysis.

But, many have been made to feel embarrassed (see sheep) if they have not invested in private credit.

And private credit is not an asset class, it’s a product offering or range. Debt (or fixed income) is the asset class and there are many other securities to choose from, if that’s your fancy.

In the past I have written and said, the suffix ‘private’ remains code for expensive, opaque, illiquid and sometimes it can proves difficult to leave. (see status exiles).

Think of private schools, private club, private banking etc etc.

It often annoys me when finance industry veterans start a sentence by saying, “I am old enough to remember…….”,

I have had the same disbelief with this current re-invention of debt products as I did when watching the CLO and CDO evolution between 2004 and 2007.

There are going to be a lot of broken portfolios.

and by the way, many, many years ago, this type of real estate lending was called either a first or second mortgage secured against one or two properties, with the funds being held or received in a solicitors trust account.

No one is curing cancer with this product range but they may be causing it.

September 10, 2026