Private debt offers several advantages over the traded subinvestment grade markets of high yield bonds and bank loans (public debt). These include more detailed due diligence information, senior investments benefiting from security over assets, lower marked to market volatility and higher returns

The Manager has a very proactive approach to structuring and managing its credits. It facilitates this by being either the sole-lender or, in the case of syndicated corporate loans, being the lead or co-lead lender. This provides for greater transparency and deal control, with the potential to structure more favourable pricing

The Manager is targeting a distribution yield of 6.0% p.a. net of fees for Class A and 10.0% p.a. net of fees for Class B. IIR stresses that all loans will be first mortgage and subject to exactly the same due diligence processes which have held the Secured Loan Series in good stead to date.

Moelis Australia is particularly well placed to identify, pursue, manage and deliver on specific credit investment initiatives capable of delivering attractive through-cycle, risk-adjusted returns with strong downside protection. The Moelis Australia Fixed Income Fund (“the Fund”) is a newly established Australian wholesale unit trust and provides its investors with exposure to a diversified portfolio of credit investments in a unique fund structure.

The ability to generate stock selection returns in a manner consistent with the Investment Manager’s expectations (which are largely derived from quantitative models it utilises) plus the ability to add alpha through TAA (which places a greater emphasis on qualitative assessments) should not only aid total returns but serve to smooth returns as the inherent ability to generate alpha.