Private credit is often valued for its income potential, but Perpetual’s Michael Murphy says risk discipline matters just as much as return.
In this video podcast, Michael explains why the team avoids direct property and development lending, instead focusing on senior secured debt from large, established Australian corporates.
He shares why understanding a borrower’s quality, sector risks and downside protection is critical in private credit, and why knowing what not to own can play a key role in preserving capital.
Here's an excerpt from the video podcast:
“We're very mindful that investors typically have significant exposure to Australian property already, either through direct investment or exposure to Australian banks.
“So we really see value in providing diversification to large corporates rather than to property developer lending, which we don't do.
"And within that, we want to be really diversified across a number of sectors and not have a real concentration to anyone sector or risk factor.
"We think that's really important."
Watch the full video interview
Hear more from Perpetual's Credit and Fixed Income team
About Michael Murphy and Perpetual’s Credit and Fixed Income team
Michael is a portfolio manager and senior high-yield analyst with Perpetual’s credit and fixed income team.
Michael manages Perpetual Diversified Private Debt Fund.
Perpetual offers a range of cash, credit and fixed-income solutions.
Our credit and fixed income team are specialists in investing in quality debt.
They take a highly active approach to buying and selling credit and fixed income securities and invest extensively across industries, maturities and the capital structure.
Learn more about Perpetual’s Credit and Fixed Income capabilities
Questions? Contact a Perpetual account manager
