Money Management - Mar 2023

The opportunity in private debt amid rising interest rates and increased market volatility

Stock market volatility has been elevated as mounting macroeconomic headwinds have added to uncertainty about the economic outlook. Meanwhile, rising official interest rates have eroded the value of traditional fixed income investments.

Fortunately, there is an asset class that may provide investors with reduced capital volatility and higher investment income in a rising rate environment – Private Debt.

Metrics Direct Income Fund

The Metrics Direct Income Fund (Fund) is a private debt fund that has a low correlation with public market securities. It targets a return of 3.25% p.a.¹ (net of fees) above the RBA Cash Rate² (currently 6.85% p.a.). So, if interest rates rise, investment returns from the Fund also rise.

Features:

Diversified portfolio of in excess of 300 corporate loans across a range of Australian industries
Monthly income³ generated from interest and fees charged to borrowers
Experienced and active management team
Monthly liquidity (where the Fund is liquid)⁴
Management fee 0.58% p.a. of the Funds NAV⁵
Minimum initial investment $1,000⁶

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Target return is a target only and may not be achieved.
RBA Cash Rate currently 360bps p.a. Neither the Investment Manager or the Responsible Entity guarantees the performance of the Fund or the return of investor's capital.
Income payments depend on the success of underlying investments and are at the responsible entity's discretion.
Where the Fund is liquid, the Responsible Entity will typically accept redemption requests monthly, at the end of each month, with 10 business days prior written notice. In certain circumstances redemptions may be restricted. Please refer to the PDS for more information.
Excluding impact of performance fees.
Direct Investors only. Minimum investment via platform may vary, refer to IDPS operator requirements.

Key Risks

Credit risk is one of the risks within a portfolio of private loan assets. We address this risk by:

Undertaking a detailed and thorough risk assessment of all borrowers we lend to and complete rigorous due diligence prior to committing capital.
Ensuring there is a sufficient equity buffer within the loan agreements to absorb any decline in the financial performance and valuation of a company.
Employing highly skilled investment professionals with experience in corporate restructuring that can act swiftly to preserve value for our investors should a workout or corporate restructure be required.

Refer to the PDS for more detail on the risks associated with investing in the Fund.

To keep up to date with opportunities in the Australian private debt market, follow us on LinkedIn or visit our website today.

Disclaimer

Equity Trustees Limited (Equity Trustees) ABN 46‌ 004‌ 031‌ 298‌ | AFSL 240975‌, is the Responsible Entity for the Metrics Direct Income Fund ARSN 641‌ 620‌ 331‌ (the Fund). Equity Trustees is a subsidiary of EQT Holdings Limited ABN 22‌ 607‌ 797‌ 615‌, a publicly listed company on the Australian Securities Exchange (ASX: EQT). The Investment Manager for the Fund is Metrics Credit Partners Pty Ltd (Metrics) ABN 27‌ 150‌ 646‌ 996‌ | AFSL 416‌ 146‌. The information provided is issued by Equity Trustees and has been prepared to provide you with general information only. In preparing this information, Equity Trustees did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither Equity Trustees, Metrics nor any of their related parties, their employees or directors, provide any warranty of currency, accuracy, completeness or reliability in relation to such information or accept any liability to any person who relies on it. Neither Equity Trustees nor Metrics guarantees repayment of capital or any particular rate of return from the Fund. All opinions and estimates included in this website constitute judgments of Metrics as at the date of website creation and are subject to change without notice. Past performance should not be taken as an indicator of future performance.

You should obtain and carefully consider in their entirety the current Product Disclosure Statement, Target Market Determination and any updated information and continuous disclosure notices before making an investment decision in respect of the Fund and assess whether the Fund is appropriate given your objectives, financial situation or needs. If you require advice that takes into account your personal circumstances, you should consult a licensed or authorised financial adviser.

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