The Wingate Property Senior Debt Fund (WPSD) leverages Wingate’s multi-decade property expertise, delivering strong, risk-adjusted returns secured by highly attractive debt investments.

Launched a year ago, the WPSD Fund provides investors exposure to portfolio comprised solely of first-ranking, senior secured property debt, the Fund targets a 6%-8% p.a. return with monthly distributions.

WPSD has so far delivered co-investors a return of 6.5% p.a. and expects the return to continue to build toward the top end of the target range (6-8% p.a.) based on broader interest rate movements.  

THE WPSD Fund, the first Wingate product to participate in the SQM rating process, was awarded 4 stars (out of a possible 5) with a ‘Superior’ status.

This status, in SQM research’s view, states that “the Fund has an appreciable potential to outperform over the medium-to-long term. Historical performance has tended to be meaningful. PDS (Product disclosure statement) compliance processes are strong. There are very little to no corporate governance concerns. Management is of a high calibre.”

“SQM Research’s rating is an endorsement for Wingate’s unique investment process as the appetite in the market for private debt opportunities continues to increase. In a rising interest rate environment, private debt provides investors with an inflation hedge and more stability in their investment portfolio,” said Michael Sack, Managing Director Wingate Funds Management.

“We are seeing a renewed level of caution and focus on risk due diligence from investors. In the current environment, this means the Wingate track record and process is seen particularly attractive and we have created additional capacity in our products to meet this demand.”

This means all our current Wingate funds – the flagship $1bn Wingate Investment Partners Trust; our Wingate Corporate Credit Series; and the Wingate Property Senior Debt Fund; are all seeing increased inflows,” he said.

“After almost 20 years of private debt investment; we remain confident that current market volatility provides a particularly opportune time for investors to consider private debt.”

Reflecting on the acknowledgement, Founder of Wingate and Executive Chairman Farrel Meltzer said that the rating was testament to the risk mitigation processes that have defined Wingate.

“Our approach, keeping our co-investors at the centre of all that we do, has been and continues to be core to the Wingate Way. This SQM Research rating is testament to the deep insights from our team; the quality of our risk and originations professionals; and the complete alignment we have with our co-investors.”

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Farrel Meltzer

Investment House Wingate has announced it has become a signatory to the Principles for Responsible Investment (PRI), an international network promoting sustainable investment through the incorporation of environmental, social and governance (ESG) considerations into decision-making.

Wingate’s PRI membership cements the firm’s dedication to responsible investment practices, recognising that ESG considerations are becoming of greater importance to a broad range of stakeholders, including business partners, co-investors, and staff.

“Our purpose at Wingate is to enlarge and enrich the lives of all of whom we come into contact,” said Farrel Meltzer, Wingate Founder and Executive Chairman.

The Wingate Way – patience, knowledge, risk mitigation, partnership, and alignment, has directed our investment decisions for almost two decades. Becoming a PRI signatory formalises our commitment to ESG considerations when assessing investment opportunities.”

David Atkin, CEO at the Principles for Responsible Investment, said: “We’re pleased to welcome Wingate as a signatory to the PRI. Responsible investment integration is a vital component across every stage and area of the investment decision making process, including in real estate, a sector which has significant potential to impact on core ESG issues. We look forward to working with Wingate on this important area.”

The UN Principles for Responsible Investment, to which Wingate is now a signatory, are:

• Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
• Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
• Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
• Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
• Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
• Principle 6: We will each report on our activities and progress towards implementing the Principles.

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Selwyn Schroeder

Australian Private Debt Investment House Wingate has announced the launch of its third Corporate Credit Fund, Wingate Corporate Credit Fund 3 (WCCF3).

This fund builds upon the opportunities identified through the first two corporate credit funds in the series, WCCF1 and WCCF2, which have collectively deployed more than $150m into Australian and NZ based companies.

“We have been delighted with the early reception of WCCF3 by our long-standing co-investors,” said Selwyn Schroeder, Managing Director of Wingate Corporate Investments. “The retreat of major lenders in the mid-market corporate space has led to a significant opportunity, and our pipeline of quality investment opportunities is compelling.”

“Our track record in this asset class and the timing of the WCCF3 launch is well placed to deliver on the fund mandate to provide co-investors with enhanced risk-adjusted returns.”

WCCF3 aims to capitalise on markets where major banks have pulled back, providing debt solutions for mid-size Australian and New Zealand companies seeking funding for growth, M&A, working capital and loan book funding.

“The asset class continues to offer resilience through the cycle, complementing public equities portfolios, particularly as investors navigate times of economic change and dislocation,”

“We have a highly experienced team who can identify, execute, and risk manage these highly unique investments. The performance of WCCF1 and WCCF2 – each delivering well into double-digit returns – demonstrate our strong track record in this sector, and we look forward to continuing to partner with co-investors in WCCF3.”

Wingate Corporate Credit fund is currently open to wholesale investors. The first two funds were oversubscribed by Wingate investors, and WCCF3 is expected to build upon this appetite.

The WCCF series sits alongside the $1bn+ property-focused Wingate Investment Partners Trust. Wingate has a 20-year track record in private debt in Australia, delivering consistent risk-adjusted returns over multiple market cycles.

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“The appetite for alternatives and private debt-based products amongst professional advisors and sophisticated investors is growing,” said Steven Hur, Wingate Chief Investment Officer. “This fund, purely invested in senior secured Australian property debt with conservative gearing, is proving particularly appealing.”

“In an environment of growing investment uncertainty, first-ranking property debt is providing a strong risk-adjusted proposition and adds an extra dimension of portfolio diversification.”

The Wingate Property Senior Debt Fund provides quarterly consistent distributions to its investors, delivering a yield of 5-7% p.a. The portfolio holds only positions in Australian property, with a bias towards residential developments. It targets investments with a loan-to-value ratio of below 60%, focusing on quality sponsors with strong financial backing and significant development experience.

The WPSD Fund sits alongside the longstanding Wingate Investment Partners Trust, with more than $1bn funds under management. Wingate has a track record of almost 20 years investing in private debt, and has successfully funded more than $13bn in property value since inception.

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Steven was recently at AMP Capital, where he was Head of Credit Research and Portfolio Manager in the Global Fixed Income division that managed over $45 Billion. Prior to joining AMP Capital in 2010, Steven was Credit Analyst at Schroders and had primary coverage of Australian and Asia-Pacific companies across various industry sectors, and prior to that at Absolute Capital as Investment Analyst covering structured credit.

“We are delighted to welcome Steven to our leadership team,” said Michael Sack, Managing Director of Funds Management. “In addition to managing our flagship fund, The Wingate Investment Partners Trust, Steven will play a key role across the firm in our investment committees, product origination and development, and co-investor, channel partner and market engagement.”

Among Steven’s professional accomplishments, the $1.3 Billion global credit fund that he led at AMP Capital was awarded the best performing fixed income fund in the Japan market by Reuters Lipper in 2016 and 2017, and Morningstar in 2016 and 2019.

“I am excited to join the Wingate team and continue to build on the firm’s track record of innovative, risk-aware investments,” said Steven Hur, Fund Manager.

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He joins Wingate with over 25 years of industry experience to lead its real estate research and intelligence capabilities, having held similar roles at Oliver Hume and Metricon Homes

Mark Harrison, Managing Director Wingate Property, said that the appointment of Mr Perkins represented an opportunity to deepen Wingate’s real estate capabilities, leveraging research and market intelligence to identify and capture emerging investment opportunities for Wingate and its co-investment partners.

“As the property market continues to adapt to the post-pandemic environment, we believe that the research and intelligence capabilities Mr Perkins brings will be a key differentiator in enabling Wingate to not only navigate the future and capitalise on emerging trends, but to effectively and proactively manage risk.

Andrew’s appointment will enable us to leverage data and insights from across the market for the benefit of our clients, co-investors and business partners, and we are delighted to welcome him to Wingate.”

Commenting on the appointment, Mr Perkins said he was pleased to be joining Wingate at a time of rapid growth. “Wingate is a unique platform and I am looking forward to bringing best-of-breed market intelligence and analysis to further grow the business.”

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Mr Farley has over 17 years’ experience in commercial property acquisitions, asset and funds management, previously holding roles at Macquarie Group and NAB. Mr Farley was most recently Fund Manager of EG’s Australian Core Enhanced Fund.

Mark Harrison, Wingate Property Managing Director said that the appointment of Mr Farley will further strengthen Wingate’s property team and facilitate the continued origination and acquisition of property investments for Wingate and its co-investment partners.

“We believe that the economic climate will continue to present attractive investment opportunities. The appointment of Mr Farley, and Wingate’s commitment to further building its Direct Property team and capability, further evidences our commitment to this sector and to capturing the unique opportunities that will present themselves in the years ahead”.

Mr Farley is a recognised industry leader with a wealth of experience in the market, and we are delighted to welcome him to Wingate.

Commenting on his appointment, Mr Farley said: “The Head of Direct Property role at Wingate brings the opportunity to build on and grow a business within an established and respected investment house.

Wingate’s unique investment approach and strong people and culture focus was a natural fit for me and I’m excited to work with the existing property team to grow the platform”.

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Kevin Wunsh

Australian private finance and investment house Wingate said unmet demand for corporate debt funding had given rise to new opportunities for non-bank lenders to support growing businesses and diversify opportunities for its investors.

Kevin Wunsh, Managing Director Wingate Corporate Investments, said that a shift in the banking system is providing a significant opportunity to deliver debt capital solutions to Australian mid-size companies.

“Australian businesses face a significant void when searching for credit to grow and expand. Traditional banks have changed their approach and seemingly reduced lending and rationed credit following the Hayne Royal Commission and changes to the regulatory environment.

“At Wingate, we believe this opens up a significant opportunity to support Australian businesses and create further diversification for our investors. We are partnering with businesses that display compelling growth potential, with a proven track record of success backed by a strong management team.”

Wingate recently completed a $20 million transaction with Crunch Fitness, allowing the business to fund new sites and continue its expansion. The Crunch Fitness transaction is the latest in a substantial investment pipeline, including debt facilities for one of Australia’s largest independent brewers, Tribe Breweries, New Zealand consumer lender Thorn, and growing invoice and supply chain finance business FIFO.

Wingate invests in established mid-size companies with a broad sector focus and to date have invested in companies across the financial services, hospitality, IT, fitness, and childcare sectors. Transactions are typically between $10m to $40m.

“Mid-size companies are significantly underserviced when it comes to seeking capital. Financing opportunities are typically too large or complex for many alternative non-bank financiers or large family offices, and too small to attract interest from the banks or global debt providers.

“One of Wingate’s key focus areas is the provision of structured funding solutions to support loan book growth of other non-bank lenders. Currently, over 50 per cent of its current corporate lending book comprises facilities in this niche sector.

“Wingate prides itself on its ability to provide flexible, tailored funding solutions to a range of mid-sized businesses. The focus remains on pursuing high-quality credit opportunities with compelling risk adjusted returns.”

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“Print, baby, print” echoes the chorus of economists, investors and currency speculators worldwide. The strong possibility the US will create more money out of thin air has led to a significant depreciation of the US dollar and an appreciation of asset prices, including equities and bonds.

Investors do not seem to be concerned by the fact that money is not really being printed. It appears to matter even less that all that occurs when quantitative easing takes place is that banks sell the Federal Reserve treasuries and receive cash (in the form of a credit on the Feds’ balance sheet) in return for the hope they will lend the extra money out.

Importantly, none of this new money actually buys anything – not gold, shares, or even Australian dollars. Investors buying these assets are mostly speculators expecting a debasement of the US dollar or an increase in risk appetite.

What is most interesting, however, is that banks are not short of cash to lend. Excess cash on US bank balance sheets is over one trillion dollars. The real problem is that borrowers – scarred by weak demand, no employment growth and increasing regulation – just don’t feel the need to borrow to invest. Consumers have learnt the long-forgotten virtue of thrift in conjunction with a decline in the value of their collateral. Hence the problem of too much cash and not enough borrowers is unlikely to be solved by injecting liquidity. It appears this is a route chosen when all other alternatives are exhausted.

The US economy will march to its own rhythm and not be significantly swayed by the odd purchase of treasuries by the Federal Reserve. The bigger issue is whether investors should sell assets that have most recently been inflated, or buy more in the expectation it will continue.

Only time will tell, but our view is that purchasing assets in the hope that central bank policy actions will steer a complex series of economic events is fraught with danger.

It is true that equities currently represent fair to good value and a long term investment at these prices will likely be well rewarded. However, it would be foolish not to acknowledge a sense of short term euphoria that is liable to produce some level of disappointment in the near future. When the excitement of the second round of quantitative easing in the US fades, perhaps so will the froth in these outperforming assets.

For domestic investors, the surge in the Australian dollar has been of tremendous interest. We note with a healthy dose of cynicism that the higher the Australian dollar rises, so too do the forecasts of where it will go. Concepts of overvaluation seem to be discarded in favour of a belief in a new world where China is king, the US and Europe are declining empires and the Australian dollar is a proxy for the changing of the guards. The euphoria surrounding the local currency evokes the myopic views towards dotcom versus old economy stocks a decade ago.

At the moment, the market does not appear to be pricing in any risks to the Australian dollar.  However, any wobble or sneeze in the global economy – or the mere hint of a slowdown in China – will be met with a significant and sudden currency reversal.

It should not be forgotten that the pillars of local strength are the Australian property market and Chinese growth. The former is regarded as one of the world’s most overvalued markets while the latter is, by many accounts, overheating. Both countries are raising interest rates, which is never good for economic growth or property prices.

If for no other reason than risk management, investors should be taking advantage of the strong currency and purchasing assets globally.

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What we are seeing at the moment are two very strong trends that are having opposing impacts on markets.  Low interest rates, low valuations and a lack of alternatives (as neither bonds nor property are seen as prospective) are key supports for equities and are helping to fuel brief periods of exuberance. However, the persistence of weak economic growth, fiscal deficits and high unemployment, are all contributing to subsequent despair and apathy which saps any market rally.

The result of such opposing forces is some unexpected outcomes.  Uniquely in a volatile market with a decidedly uncertain and negative bias, a number of small speculative companies are performing very strongly. Many small caps are at 52-week highs while quality blue chips languish at multi-year low valuations. Speculation in small caps is symptomatic of a low interest rate environment whilst at the same time investor disillusionment is keeping investors away from the big end of town. This market behaviour provides very little predictive value.

In addition to macro-economic uncertainty there have recently been attention-grabbing statements and sound bites from market commentators that seek to add insight but rather disclose a weakness of analysis.  Such statements only add to the confusion level for investors.  For example, following a 10 year period of flat equity markets, it is now often said that “buy and hold” is dead.

Bold, game-changing statements such as these are common after periods of above or below trend outcomes. Recall the tech boom of 1999-2000 and how investors scoffed at valuations and earnings. “Earnings don’t matter” they cried as they rushed to embrace the dotcom economy at all costs. That strength of conviction is back in force but this time in reverse. These days it’s “P/Es don’t matter” as the marginal buyer seems not to care about the long term given so much uncertainty.

Adopting this assumption fails to grasp the components of investment returns or, more specifically, that a share price is a function of valuation and earnings. Suggesting that stock prices will not rise over time is an explicit statement that earnings will stagnate or valuations will drift lower. But historical evidence is firmly against this assumption.

Over the past 10 years the average earnings growth of S&P 500 constituents was 3% per annum despite two severe recessions. It is prudent to assume that at least a similar rate of growth can be maintained over the next 10 years. With the addition of dividends, returns of 6-7% per annum are achievable in the medium term with no change in valuation.

On the valuation side, company earnings are currently valued very cheaply at around 12 times earnings. The reason share prices went nowhere over the past 10 years was exclusively due to valuations contracting from about 25 times earnings to close to 12 times today. The long term valuation range is between 10-25 times earnings with only brief periods above and below this range. Given corporate balance sheets are in great shape and investor sentiment is so poor, the risk to valuation is arguably to the upside. In this environment, rising valuations can easily lead to double digit returns even assuming weak earnings growth.

For these reasons, at Wingate we believe the bull case for equities has significant fundamental underpinnings. The negativity bubble engulfing investors has delivered this opportunity but investors need to get away from the immediate noise in the market and maintain their focus on fundamentals.

In addition, the strength of the Australian dollar, which for many reasons will likely revert lower over time, provides local investors an exceptionally strong currency. Using the strong currency to purchase international equities provides an additional investment benefit that is unavailable on domestic stocks.

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