Pengana sees continued growth in global private credit, launches new SMA Fund

Nehemiah Richardson

Pengana Capital Group continues to grow its non-institutional private credit division, Pengana Credit, announcing the launch of a unique separately managed account fund (SMA Fund) solution as part of a recent shareholder update.

According to Pengana, the SMA Fund is the only diversified global private credit product in the Australian SMA market. Its first client has been onboarded, and Pengana has secured initial platform access on the North platform.

Nehemiah Richardson, CEO of Pengana Credit, said strong inflows were expected over the coming quarters. “The SMA Fund adds yet another non-institutional private credit investment option to meet the growing demand for global private credit among Australian investors.

“Outside of Australia, global private credit is arguably the most highly sought after asset class. Yet there has been a severe shortage of applicable products available in the Australian non-institutional investment market.”

Pengana has sought to establish a market leading position in global private credit by partnering with Mercer and launching several different vehicles, including the TermPlus online term accounts for retail investors, the listed Pengana Global Private Credit Trust (ASX: PCX), and the unlisted wholesale Pengana Diversified Private Credit Fund.

Globally, the private credit industry has surged since the GFC, having nearly tripled in value over the last 10 years to a US$1.5 trillion market size at the start of 2024. Some forecasts suggest the market could expand to US$2.8 trillion by 2028, with fund manager BlackRock predicting it will grow to US$3.5 trillion.

Mr Richardson said the new investment vehicles introduced a radical level of global private credit access for Australian investors. “Even high net worth investors previously struggled to gain meaningful exposure, but now any Australian retail investor can access the same diversification and returns enjoyed by institutional investors.”

But he said investors needed to be selective in their exposures as the sector becomes more hyped. “It’s important to recognise that not all private credit investment are the same.

“Geography plays a big role as there are a number of differences between global private credit investments, and local Australian private credit.

“Global private credit is a huge market playing a major role in the US economy and many European economies. Australian private credit is mostly in areas where banks do not have credit risk appetite, for example commercial property.

“The other major consideration is the quality and track record of the underlying managers, and whether they have managed private credit investments through different cycles.”