Direct lending: Navigating risks and opportunities in the US middle market

Tas Hasan, Partner & Chief Operating Officer, Deerpath Capital

In this exclusive interview with Global Investment Institute (GII), Tas Hasan, Partner and Chief Operating Officer of Deerpath Capital shares his experiences navigating the US middle market, how his organisation is providing investors globally with access to this burgeoning opportunity set in direct lending to middle market corporates, and the key pitfalls for investors to avoid in order to minimise credit losses.

“The next 12 to 18 months may prove to be a pivotal time for private credit markets. We expect to see the concerns that have seen the more liquid leverage loan and high yield bond markets sell off this year to start to be reflected in the quarterly revaluations of private credit manager loan books.

“With borrowing costs amplifying the rising level of expenses already caused by severe inflation, it will be interesting to see which managers have portfolios that will were built to withstand the continued pressure on earnings. On top of this, once revenues take a hit in a recessionary environment, we believe that we will see a clear separation between those lenders who played it safe during the boom times and those that took elevated risks.”

Managing fixed income portfolios in a changing regime environment

Magdalena Kinal, Fixed Income Portfolio Manager

In this exclusive interview with GII, Magdalena shares her perspectives and the approaches institutional investors can take to navigate their portfolios through the changing regime environment, with rising rates and heightened inflation.

“In 2022, a traditional asset owner with a CPI+ or Cash+ target has faced a twofold effect, an unrealistic investment objective and significant reduction in asset values, where an allocation to fixed income has not provided a defensive anchor. Moreover, the idea that an allocation into inflation-linked bonds managed against traditional benchmarks offers inflation protection, while ignoring the embedded duration risk, has proved to be naïve.

“Managers who diversified their defensive sleeve via an allocation to defensive alternative strategy products or through tail-risk hedging strategies, such as option strategies, have generally benefited in 2022, albeit at the expense of the income which would have been earned via bonds”, says Magdalena.

Tracey Whitby appointed Head of Finance and Operations at Aware Real Estate

November 2022

GII congratulates Tracey Whitby on her appointment as the Head of Finance and Operations (CFO) of Aware Real Estate (ARE).

Aware Real Estate is the largest manager of Built-to-Rent in Australia and was launched by Aware Super to grow its directly-owned Australian property portfolio, with the aim of hosting AU$7 billion in assets within five years, by 2027. Aware Super is one of Australia’s largest superannuation funds managing AU$150 billion on behalf of its 1.1 million members.

Tracey will be reporting to the CEO of ARE, Michelle McNally and she is based in ARE’s Sydney office.

We wish Tracey all the best in her new role and continued success to the Aware Real Estate team.

Nick Tranotis appointed as ESG Manager at CareSuper

October 2022

GII congratulates Nick Tranotis on his appointment to the role ESG Manager at CareSuper.

CareSuper is an industry superannuation fund for professional, managerial and administration workers, with AU$20 billion in assets under management.

Most recently, Nick held the position, Manager – ESG Engagement at the Australian Council of Superannuation Investors (ACSI). He will work with the Fund’s Head of ESG, Claire Molinari to manage the net zero program, engagement and proxy voting activities. Claire reports to the Chief Investment Officer, Suzanne Branton.

We wish Nick all the best in his new role and continued success to the CareSuper team.

Inflation outlook and the implications for investors

Global Thought Leader Spotlight on Joe Kalish, Chief Global Macro Strategist, Ned Davis Research (NDR)

“The intermediate-term outlook will hinge on whether central banks can return inflation back to targets without doing a lot of economic damage. If they can, that would create a favourable environment for fixed income. But any rally could end once the cycle turns, if the supply side challenges haven’t improved and inflation returns once economies recover. The outcome could be even worse for bond investors if central banks abandon the inflation fight before the job is done. Either way, the risk is that investors will start to lose confidence in central banks, which should result in inflation expectations becoming unanchored, term premiums rising and new highs in bond yields.”

Read more of Joe Kalish's analysis of the short, medium and long term inflation outlook and the implications for investors in this Global Investment Institute exclusive Global Thought Leader Spotlight. Joe Kalish is the Chief Global Macro Strategist for Ned Davis Research (NDR) Group. He is responsible for all of the NDR's bond and economic analysis, which includes developing and communicating the firm's global and U.S. fixed income strategies with a particular emphasis on monetary policy.

Nigel Wilkin-Smith appointed as Senior Portfolio Manager, Portfolio Construction at NSW TCorp

October 2022

GII congratulates Nigel Wilkin-Smith on his appointment to the role Senior Portfolio Manager, Portfolio Construction at NSW TCorp.

NSW TCorp is the investment and financial management partner of the New South Wales government and its investment management arm manages AU$102 billion in assets on behalf of clients, as at 30 September 2022.

Prior to joining NSW TCorp, Nigel spent 11+ years at the Future Fund, most recently in the role of Director, Portfolio Construction and before that he was the Head of Strategic Research at van Eyk Research. In his past, Nigel also worked as a research fellow at both the University of Queensland and the Australian National University (ANU). He holds a PhD in Mathematics from ANU.

We wish Nigel all the best in his new role and continued success to the NSW TCorp team.

Dynamics of the private debt market: Assessing risks, opportunities and ESG developments

J.T. Munch, Principal, Capital Solutions, Neuberger Berman

In this exclusive interview with Global Investment Institute (GII), Neuberger Berman’s Principal of the Capital Solutions team, J.T. Munch shares his investment experiences navigating private markets, discussing where he sees greatest investment opportunities currently, the key pitfalls investors face and how to manage associated risks, along with the key developments occurring with respect to ESG, in pursuit of net zero targets.

Tas Hasan, Partner and COO, Deerpath Capital, visiting Australia 5 – 9 December 2022

Roadshow Announcement | 5 – 9 December 2022, Australia

Tas Hasan is a Partner and Chief Operating Officer (COO) of Deerpath Capital and a senior member of the organisation’s investment committee. Tas will be visiting Australia from 5 – 9 December 2022.

Deerpath Capital is a specialist private credit manager focussed on the US direct lending market, providing flexible, cashflow-based senior debt financing to sponsor backed lower middle market companies (US$50m – US$200m EV), offering substantial current income with strong downside protection through first lien, senior secured investments.

To express interest in meeting with Tas on his visit to Australia, please contact Ben Daly, Head of Investor Relations – ANZ, Deerpath Capital, Australia.

Jason Huang appointed as the Head of Cash, Fixed Income & Credit at Brighter Super

October 2022

GII congratulates Jason Huang on his appointment to the role Head of Cash, Fixed Income and Credit at Brighter Super.

Brighter super is a Queensland based superannuation fund which has been operating for more than 56 years. The Brighter Super Group managers approximately AU$31 billion in retirement savings on behalf of its 260,000 members. The Group has been formed through the coming together of LGIAsuper, Energy Super and Suncorp’s superannuation business (SPSL).

Jason is an experienced investment professional specialising in fixed income and alternatives with expertise in manager selection and portfolio construction, gained through his roles with asset management and asset allocator organisations.

We wish Jason all the best in his new role and continued success to the Brighter Super team.

Chris Drew promoted to Head of Portfolio Construction, External Equities, REST

October 2022

GII congratulates Chris Drew on his promotion to the role Head of Portfolio Construction, External Equities, at REST.

Established in 1988, REST is amongst the largest superannuation funds in Australia by membership, with approximately 1.9 million members and AU$66 billion in assets under management.

Chris joined REST in May 2021 in the role Head of Australian Equities, with responsibility for overseeing REST’s Australian Equities asset class.

We wish Chris all the best in his new role and continued success to the REST team.

Sonia Bluzmanis promoted to Head of Research, External Equities, REST

October 2022

GII congratulates Sonia Bluzmanis on her promotion to the role Head of Research, External Equities, at REST.

Sonia is a senior funds management executive with 16 years’ experience in investment research and portfolio management, currently based in London (UK). Sonia joined REST from BT Investment Group in May 2021 and took on the role Head of Global Equities, with responsibility for managing REST’s global equities asset class, the fund’s largest asset class by funds under management.

We wish Sonia all the best in her new role and continued success to the team at REST super.

Equip strenghthens investment team with new appointments and internal promotions

October 2022

GII congratulates Darren Rosario and Libby Sparshatt on their promotions to the roles, Deputy Chief Investment Officer and Head of Asset Allocation at Equip, respectively, and we extend our congratulations to three new senior hires who have joined the Fund also, namely Jessie Pettigrew, Alister Wong and Manish Utreja.

Equip manages AU$30 billion for over 140,000 members across both Equip and Catholic Super. The Fund services employers and members from the energy, resources, water, infrastructure, manufacturing, education, health, legal and services sectors. Equip is a hybrid fund, operating both defined benefit, accumulation and pension plans.

We wish the Equip team continued success.

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