Private lending as the preferred investment class and why family offices prefer it

discussing investment growth and portfolio

Superannuation has been a standout investment for the past decade, with the top 30 funds recording an average gain of 9.2 per cent pre COVID-19.

But this is changing. Fast.

The IMF continues to downgrade forecasts for economic growth across the world driving further capital pressures across all asset classes.

The decline is across roughly 90% of the world’s economies with the compounding effects of COVID-19, escalation of US-China trade tensions and strict credit policies in China.

The IMF’s Economic Counsellor Gita Gopinath claims “the cumulative loss in output relative to the pre-pandemic projected path is projected to grow from $11tn over 2020-21 to $28tn over 2020-25,”

Australia outspent every other country – except Qatar – with the federal government’s $214 billion fiscal response to COVID-19, a new analysis found. In essence, our nation spent 10.60% of Australian GDP growth. This is the highest rate of all advanced economies.

It therefore comes as no surprise that as a diversification play, private lending is the preferred investment as a growing asset class, often perceived as having superior strategy vs. traditional bonds investment.

Distilling to a granular level, businesses such as family offices and property developers continue to need fresh capital for construction, refinance their existing loans or fund their financial growth.

Investors often think that high yield is synonymous with high risk.

This is untrue.

At the heart of private lenders in Australia, Vado Private is a risk manager.

Our due diligence and risk appetite reflect this cautious tone.

As a former banker, private lender, and real estate developer, I have a holistic understanding on both sides of the same coin.

As an experienced risk advisor, I know how to unlock potential through effective risk management.

And my team doesn’t limit itself to traditional views of risk, whether that means using sophisticated analytics or even having the courage to say no.

The result is a new way to embrace and mitigate risk that drives superior investment results.

Whilst real estate private lenders always champion their borrowers, I assess every transaction with an investor’s bias.

Why? Because capital preservation is my priority.

As a private lender, my absolute mandate is to act in the interest of the lender who are our real estate investor partners.

Diligent in execution, the average private lending transaction time from origination to settlement is only 13 days without compromising our strict risk and compliance framework.

Private lending is risk management and we are only remunerated on each transaction once the private loans are fully discharged, whilst still paying monthly distributions.

In the last 36 months, Vado Private has circulated more than $150 Million into the private lending Australia market across 53 transactions.

Transparent across all our transactions, I welcome you to reach out for either a confidential discussion or an Information Memorandum on our investment opportunity, annual returns, and strategy.