Private credit offers investors with an opportunity to earn steady monthly income, a simple way to diversify your portfolio – whilst providing protection against inflation and performance through the economic cycle.

Recently, we’ve been speaking with investors and advisers on the features and benefits of Private Credit Funds, specifically the Aura High Yield SME Fund and the Aura Core Income Fund. Both Funds invest in portfolios of Australian small to medium-sized enterprise business loans, originated by non-bank lenders.

What we discovered is that people think about investing in private credit funds ‘tactically’, waiting for a recession or some sort of economic setback before proceeding.

Some advisers also believe there will be an economic slowdown and conclude credit margins won’t be high enough to compensate for that risk.

In this whitepaper I identify why thinking about private credit strategically rather than tactically may produce a more desirable long-term outcome for investors.