REST ups private credit exposure via Metrics

Private credit has moved further into the mainstream with major industry fund REST increasing its exposure to the asset class via Metrics Credit Partners.

REST announced that it had increased its investment in the Metrics Real Estate Debt Fund (REDF) stating this represented a further diversification of REST’s private markets and whole of fund exposures.

Commenting on the investment, REST chief investment officer, Andrew Lill said it provided the fund with the ability to capitalise on attractive conditions in the non-bank lending market.

“REDF offers an opportunity to grow Rest members’ savings through investment in a diversified portfolio of high-quality commercial real estate loans across residential and industrial projects,” he said.

“With its attractive risk-adjusted return profile, we expect REDF will deliver strong results to Rest members.

“With a combination of higher interest rates and traditional banks scaling back commercial real estate lending, we believe non-bank lenders have a good opportunity to participate in the sector with terms that are typically more favourable than seen previously,” Lill said.

He noted that Australian lenders commonly charged both a line fee and a margin for assets before they are constructed, leading to potentially higher levels of return thatn similar overseas loans.

“We believe the characteristics of the Australian commercial real estate market also offer unique advantages compared to overseas markets that further build on REDF’s compelling investment proposition,” he said.