Australian Investors Podcast
Private credit income investing for retirement, with Nicole Kidd from Schroders RF
Jan 22, 2025
Nicole Kidd, Managing Director at Schroders RF, shares her extensive expertise in private debt investment. She unpacks the concept of private credit, differentiating it from traditional fixed income and bonds. The discussion includes insights on syndicates, first mortgages, and assessing dividend yields. Kidd emphasizes the importance of due diligence and choosing experienced managers to navigate possible risks in this growing asset class. Listeners will also learn how to effectively incorporate private credit into their retirement portfolios.
47:29
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Quick takeaways
- Private credit offers a distinct income alternative for retirees by providing higher returns through illiquid investments compared to traditional fixed-income options.
- A thorough assessment process, including the 'five C's of credit', is crucial for mitigating risks associated with private credit investments.
Deep dives
Understanding Private Credit
Private credit refers to any type of credit not traded on public exchanges, typically provided by non-bank lenders who negotiate loans privately with businesses. This asset class has seen rapid growth as it offers an appealing income alternative for investors. Companies seeking financing for various assets, such as real estate or operational needs, often prefer private credit for its flexibility. By structuring loans to mitigate downside risks, private credit providers aim to deliver investors exposure to higher returns while navigating the complexities of borrower assessments.
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