Spotlight on Phil Strano, Head of Australian Credit Research, Yarra Capital Management
Global Thought Leader Spotlight
Phil Strano, Head of Australian Credit Research, Yarra Capital Management
In my role as Head of Credit Research at Yarra Capital Management, I oversee the development and implementation of investment strategies across a range of credit asset classes. I provide market insights and support our investment teams to ensure portfolios are positioned to meet client objectives in evolving economic conditions.
A core part of my role is balancing risk and return through multi-sector credit strategies to help our clients navigate an increasingly complex market environment.
Overview of the private credit landscape: Broader, deeper, more dispersed
Private credit has moved well beyond traditional direct lending. Today’s market spans asset-based finance, infrastructure debt, and specialised lending, each with very different sensitivities to growth, rates, and liquidity.
Competition for deals has intensified. In some segments, leverage is rising and covenants are weakening, pushing parts of the market closer to equity-like risk without equity-like returns.
This growing dispersion is why selectivity now matters as much as strategy.
For investors with long-term time horizons, the illiquidity premium can still be attractive when supported by strong underwriting, seniority in the capital structure, and transparency around risk and valuation. For investors that require liquidity, monthly redemptions backed by illiquid assets remain largely untested through an economic cycle.
In both cases, diversifying Australian credit exposures in a market saturated with private credit capital aims to provide investors with higher through-the-cycle, risk-adjusted returns.
What role can private credit play?
When structured as a multi‑sleeve allocation across public and private assets rather than as a single category, Australian private credit can offer meaningful portfolio advantages.
These include selective exposure to best‑in‑class private credit assets through the cycle, a balanced mix of risk and return, and continued access to genuine liquidity.
Ultimately, diversification is not about holding more private credit; it is about diversifying how credit returns are generated and limiting downside risk across public and private markets.
Positioning for 2026
As relative value shifts across credit markets, the focus should remain on:
Building multi-credit-strategy exposure, not single-sleeve allocations
Choosing structural protection over headline yield from an active manager
Keeping flexibility to rotate capital as opportunities change to maximise risk-adjusted returns
Developing long-term manager partnerships built on access and alignment across platforms
Implications for sophisticated investors
In 2026, private credit is not a one-size-fits-all solution. Dispersion across strategies, structures, and managers means results are increasingly determined by portfolio construction, not market beta.
For patient capital, the edge comes from building portfolios that are diversified, selectively sourced, structurally disciplined and tailored specifically for the Australian credit marketplace. The goal is not simply to allocate solely to private credit, it is to build an Australian credit portfolio that can deliver income, resilience and protection across market cycles.
Phil will be presenting at Global Investment Institute’s upcoming Family Office Investment Forum, taking place on Thursday, 19 March 2026 in Melbourne CBD, Victoria. To register your interest in attending, click here or for more information email zlatan@globalii.com.au.
Phil Strano, Head of Australian Credit Research, Yarra Capital Management
Phil is the Head of Australian Credit Research at Yarra Capital Management. With an extensive career in asset management and institutional banking, Phil is a credit specialist with a deep understanding of the fixed income landscape. He is Portfolio Manager of the Yarra Higher Income Strategy and Deputy Portfolio Manager for Yarra’s RMBS and LBO strategies.
In more than 10 years managing portfolios and 20 years analysing financial markets/securities, Phil has amassed extensive experience in all major credit segments. These include listed/unlisted, rated/unrated, investment and sub-investment grade, bonds/loans and derivative instruments.
Prior to joining Yarra Capital Management in May 2017, Phil spent eight years with Victorian Funds Management Corporation (VFMC) in senior roles managing credit portfolios. He previously spent approximately four years with Challenger as a Senior Analyst and a Portfolio Manager, following more than 10 years with National Australia Bank where he worked first as an Economist and Analyst before moving into the institutional banking team to cover credit.
Phil holds a Bachelor of Economics (Honours) from Latrobe University, a Graduate Diploma Applied Finance and Investment (FINSIA) and a Master of Business Administration from the Australian Institute of Management.
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