QIC has expanded its Private Debt portfolio, inking new deals in the diagnostics imaging and family entertainment sectors.
The senior secured loans in PRP Diagnostic Imaging and The Entertainment and Education Group (TEEG) form part of arrangements exceeding $1 billion in total facility size.
Head of Multi-Sector Private Debt (MSPD) Phil Miall said the debt funding demonstrates there are compelling cyclical and structural opportunities available within the asset class.
“In these rough economic waters, we see Private Debt as one of the steadier ships for investors to sail on,” Mr Miall said.
“As well as the strong quality of these two investments and the attractive risk-adjusted returns we see for our clients, these transactions add to portfolio diversification, with healthcare and entertainment sector exposures sitting alongside existing investments in the technology, consumer staples and non-bank financial services sectors.
“These latest deals are a prime illustration of the high quality, appealing yields we believe are currently available to private debt investors, and we anticipate the time is ripe for a strategic asset class over-allocation.”
With a broad network across New South Wales, PRP Diagnostic Imaging is exposed to the fastest growing segments of the healthcare system with sub-speciality expertise in oncology, musculoskeletal imaging and cardiology.
The case for The Entertainment and Education Group is grounded in its footprint across the Asia-Pacific, including 330 stores under the well-established Timezone, Kingpin, Play n Learn and Zone Bowling brands.
“Our team has confidence that the revenue models are defensible, and in our view, strong underlying demand drivers will support the businesses’ continued growth despite a slowing economy,” Mr Miall said.
A new QIC report, Multi-Sector Private Debt Market Opportunity, revealed gross yields for domestic private debt assets have almost doubled in the last 12 months.
It found investors can now source high quality domestic private debt assets at gross yields of nine to ten percent, compared to approximately five per cent a year ago.
“History suggests when market volatility is high, liquidity can be challenged,” Mr Miall said.
“Many traditional debt investors have been subject to significant margin calls and trade settlement requirements, prompting a withdrawal from the market.
“For those who can focus on medium-term horizons, we believe there is a timely opportunity to secure attractive medium-term returns with improved transaction structures, as these deals demonstrate.
“We will continue to marry the flexibility of capital and our network of relationships to drive value for clients.”
David Spiez, formerly of Standard Chartered Bank, Citi and JP Morgan, joins the QIC MSPD team this month as Director, bringing over 20 years’ experience in originating and executing transactions across global markets.
“David’s real estate investing pedigree is an excellent fit for our Multi-Sector Private Debt strategy,” Mr Miall said.
“His appointment will allow us to capitalise on the range of attractive investment opportunities available in the Australian and New Zealand private debt space.”
The addition of Spiez follows an expansion of QIC’s Multi-Sector Private Debt team, including the appointments of Bettina Lung and Carlo Lucci as Director and Associate Director, respectively.
