VicSuper continues to innovate in the Australian bond market

Media coverage: Australian corporate loan investor grows funds and market | AFR 10 Sep 2015

VicSuper has announced a $100 million investment in Metric Credit Partners, to be invested in diversified Australian senior loans. This announcement comes at a time when the Australian Bond market is coming to life with Apple launching a corporate bond issue. The investment will form part of VicSuper’s domestic fixed interest strategy and will deliver VicSuper exposure to high quality, floating rate loans with investment exposure diversified across the credit curve.

Metrics Credit Partners provides exposure to syndicated loans of predominately Australian corporates and infrastructure projects. Historically, Australia’s lending market has proven inaccessible to non-bank investors because of the considerable capital required to achieve portfolio diversity and market acceptance from both borrowers and bank lenders. As an aggregator of non-bank investor capital and direct lender, Metrics Credit Partners is able to originate and provide its investors with unique access to the loan market.  

The investment in Metrics provides VicSuper with unique access to Australia’s premier corporate fixed income and credit market. It offers highly attractive, risk-adjusted and defensive returns, which are derived from Metrics’ participation as a lender in the once bank dominated syndicated loan market. VicSuper is one of only a few superannuation funds accessing this market, highlighting their continued innovative approach to sourcing investments.

Oscar Fabian, VicSuper’s Chief Investment Officer said, ‘‘we believe the depth of credit experience within the Metrics team will be of great benefit to our members. With the cash rate at an all-time low we believe that the economic conditions, both in Australia and globally will inevitably lead to the RBA raising interest rates in the medium term. However uncertainty surrounds the timing and extent of these changes to monetary policy.’

Andrew Lockhart, Executive Director of Metrics Credit Partners, said ‘VicSuper’s investment is aimed at identifying value on a risk-adjusted basis across the fixed interest and credit markets at a time when the search for defensive yield is becoming increasingly difficult. When investment markets experience increasing levels of volatility, investor return expectations are being challenged. We’re experiencing increasing interest in the strategies brought to the market by Metrics Credit Partners’. 

Mr Fabian continued, ‘the essential characteristic of an Australian loans portfolio is the ability to significantly reduce interest rate duration risk (i.e. the negative impact on bond prices of rising interest rates) by focussing on floating rate loans. The introduction of Metrics into the fund solidifies this focus.’

Media coverage: Australian corporate loan investor grows funds and market | AFR 10 Sep 2015

VicSuper has announced a $100 million investment in Metric Credit Partners, to be invested in diversified Australian senior loans. This announcement comes at a time when the Australian Bond market is coming to life with Apple launching a corporate bond issue. The investment will form part of VicSuper’s domestic fixed interest strategy and will deliver VicSuper exposure to high quality, floating rate loans with investment exposure diversified across the credit curve.

Metrics Credit Partners provides exposure to syndicated loans of predominately Australian corporates and infrastructure projects. Historically, Australia’s lending market has proven inaccessible to non-bank investors because of the considerable capital required to achieve portfolio diversity and market acceptance from both borrowers and bank lenders. As an aggregator of non-bank investor capital and direct lender, Metrics Credit Partners is able to originate and provide its investors with unique access to the loan market.  

The investment in Metrics provides VicSuper with unique access to Australia’s premier corporate fixed income and credit market. It offers highly attractive, risk-adjusted and defensive returns, which are derived from Metrics’ participation as a lender in the once bank dominated syndicated loan market. VicSuper is one of only a few superannuation funds accessing this market, highlighting their continued innovative approach to sourcing investments.

Oscar Fabian, VicSuper’s Chief Investment Officer said, ‘‘we believe the depth of credit experience within the Metrics team will be of great benefit to our members. With the cash rate at an all-time low we believe that the economic conditions, both in Australia and globally will inevitably lead to the RBA raising interest rates in the medium term. However uncertainty surrounds the timing and extent of these changes to monetary policy.’

Andrew Lockhart, Executive Director of Metrics Credit Partners, said ‘VicSuper’s investment is aimed at identifying value on a risk-adjusted basis across the fixed interest and credit markets at a time when the search for defensive yield is becoming increasingly difficult. When investment markets experience increasing levels of volatility, investor return expectations are being challenged. We’re experiencing increasing interest in the strategies brought to the market by Metrics Credit Partners’. 

Mr Fabian continued, ‘the essential characteristic of an Australian loans portfolio is the ability to significantly reduce interest rate duration risk (i.e. the negative impact on bond prices of rising interest rates) by focussing on floating rate loans. The introduction of Metrics into the fund solidifies this focus.’