Pinnacle Insights Series 2025
Metrics Credit Partners – Private Credit
Transcript
What is the role that Metrics private debt plays in an investor portfolio?
Private debt serves multiple roles in an investor’s portfolio. On the lower-risk end, it offers a defensive allocation, similar to traditional fixed-income alternatives. On the higher-risk end, it can act as an equity market replacement through high-yield senior debt, mezzanine debt, or structures where managers take equity warrants or positions. This shift from public equities to private credit provides the potential for higher yields and upside participation.
What are the key strategies that differentiate Metrics?
Metrics assesses each transaction based on its merits, identifying the most suitable part of the capital structure for financing. In most cases, this means providing senior secured debt, which constitutes the majority of our funds. However, we also offer mezzanine or subordinated debt and may take equity positions in certain transactions. Our ability to operate across the full capital structure, from debt to equity, is a unique aspect of our product offering.
Metrics focuses on transactions involving companies with strong cash flows and reliable debt repayment sources. As a result, we typically avoid sectors with volatile earnings, such as natural resources and agriculture, where fluctuating cash flows could impact a company’s ability to service and repay its debt.
What is Metrics’ outlook for private lending in 2025 and where do they see the greatest opportunities?
Metrics is not a macro-driven firm; our approach is fundamentally bottom-up, focusing on the financial health of each company we lend to. Market commentary is often backward-looking, but many past disruptions such as rising construction costs in 2021 and supply chain challenges have already played out. Businesses have adjusted to shifts in demand, supply, and cost inflation.
Our focus is on current market conditions with a forward-looking perspective. Despite significant interest rate increases, the demand for corporate credit remains strong, supported by solid fundamental drivers that justify continued lending in key sectors.
This transcript has been edited for written clarity.
Disclaimer
This presentation has been prepared by Metrics Credit Partners Pty Ltd ABN 27 150 646 996 AFSL 416146 (Metrics) and issued by Pinnacle Investment Management Limited (ACN 109 659 109), an Australian public company which holds an Australian financial services licence (AFSL) No. 322140.
The material herein is provided for informational purposes only and should not be construed as investment advice or an offer or solicitation, recommendation or offer to buy or sell any security, financial product or instrument. The material herein does not constitute an offer or solicitation in any jurisdiction where or to any person to whom it would be unauthorized or unlawful to do so. Prospective investors should inform themselves as to any applicable legal requirements and taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might be relevant.
Responsibility for Information
Metrics has prepared this presentation from sources it believes to be correct and based on the information available to it and the facts and circumstances in existence as at the date of this document. Neither Metrics nor any of their related entities, associates, officers, employees or agents make any representation or warranty, express or implied as to or assume any responsibility or liability for the authenticity, origin, validity, accuracy or completeness of any information, statement or opinion contained in this presentation or in any accompanying, previous or subsequent material. To the maximum extent permitted by law, Metrics and each of their related entities, associates, officers, employees or agents disclaims all and any responsibility or liability for any loss or damage which may be suffered by any person relying upon any information contained in, or any omissions from, this presentation.
Reliance on Presentation
This presentation has been prepared without taking into account any particular person’s objectives, financial situation or needs. It does not purport to identify the nature of specific market or other risks associated with any investments described within it and does not constitute any legal, taxation, investment or accounting advice. All information in this presentation is indicative, is based on certain assumptions and current market conditions and is subject to change without notice. No information contained in this presentation constitutes a prediction or forecast as to the performance of any investments. Any historical information contained in this presentation is provided by way of illustration only, past performance is not a guide to future performance and actual performance may differ materially. Assumptions upon which financial illustrations are based may differ from actual circumstances. No reliance should be placed on the information in this presentation and any investment decision should be based only on the information in final offer documents and the purchaser’s own due diligence, inquiry, assessment and advice in respect of the products and investments described herein.
Confidential
This document and all of the information contained in it must not be disclosed to any person or replicated in any form without the prior written consent of Metrics.
