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Barings to launch Australian private credit fund targeting $893 million

Published Nov 14, 2023 16:04
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Investment firm Barings LLC, with a robust presence in the Asia Pacific region, is set to launch an Australian private credit fund, aiming to raise A$1.4 billion ($893 million) from institutional and high net-worth investors. Shane Forster, head of Barings' Asia Pacific private finance group, announced that the fund will provide an alternative lending avenue for Australian businesses over the next 12-18 months.

The move comes as the global private credit market has expanded to a massive $1.6 trillion industry. This growth is largely attributed to traditional banks tightening their lending criteria and shying away from riskier investments. In response to this shift, companies such as Whitehaven Coal (ASX:WHC) Ltd., Star Entertainment Group Ltd., and AirAsia have increasingly turned to debt funds for financing.

Barings' new fund is poised to offer investors attractive net returns of five to six percentage points above the cash rate. This is particularly notable following the Reserve Bank of Australia's recent decision to increase the cash rate to a 12-year high of 4.35%. The fund represents an opportunity for investors seeking higher yields amidst a landscape of cautious bank lending.

With approximately A$2.6 billion in loan assets already under management in Australia, Barings has shown a preference for investing in sectors such as healthcare, education, and software, which are considered lower-risk compared to some of their smaller deals in Europe and the United States.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Barings to launch Australian private credit fund targeting $893 million
 

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