Alternatives Investment - Private Lending/Credit

When it comes to alternative investment, most people would think of hedge funds and direct real estate. Another alternative investment which has been gathering momentum in Australia is private lending or private credit.

Private lending in property is otherwise known as non-bank lending, as the name suggests this is simply loans provided by groups other than banks. While this is a common part of financial markets in Europe and the USA, it has been slower to became mainstream in Australia. Traditionally the realm of family offices lending to single property projects at higher than bank rates, this market has grown substantially. With funding for property development harder to come by from the major banks, funds management groups and super funds have stepped in to provide a solution and generate solid returns for their investors at the same time.
A private loan operates in much the same way as a bank loan, the lender holds a mortgage over the property and the borrower pays a set level of interest. If the borrower cannot pay, the lender has the legal right to sell the property to recoup their loan. The borrowers generally use private lending for a short period of time and transfer to bank loans when they meet the criteria. The private loan can be a way to get a project off the ground that otherwise might not have gone ahead.
At Avari, we are a licensed fund manager, we raise funds from our investors and lend out to commercial projects such as land, construction, commercial, residual stock, and bridging loans. We are an active and well-known player within the financial service industry. Our track record and connection in the industry have given us access to deals and referrals from brokers, bankers and institutional investors.

AVARI, as a property investor themselves, seeks to contribute to the borrower's success by sharing its in-house property expertise, including advice on asset management, development, leasing and sales. This also allows AVARI to access deals which may not be available to a standard lender. AVARI's property market knowledge allows fast and efficient due diligence, we have a deep understanding of how to acquire and manage assets and complete a development. AVARI's experience in property development allows its team to analyse loan deals to identify potential issues that may arise during development.
We have been an active player in the private lending market since 2015 and have a 0% losses on loans we have originated. Our Private Loan Income Fund is a great way to access this market, the fund contains a pool of loans originated and managed by Avari and targets 9%pa return. Since inception the fund has returned 10.76%pa (as at October 2021).