What You Should Know About Investing in Private Debt

What You Should Know About Investing in Private Debt

Experienced high-net-worth investors know the importance of having a diverse portfolio that includes alternatives to traditional investments like bonds and stocks. 

While stocks and bonds have the potential for considerable capital growth, more stable and predictable investments like private debt funds help provide a stronger and safer foundation for your portfolio.

Benefits of investing in private debt

Investing in private debt can have many benefits as part of your investment strategy. One of the most significant of these is stable income generation. Think of private debt as lending money to a borrower in exchange for regular income in the form of repayments via interest. Even when the market experiences volatility and your traditional investments falter, you can rely on the income generated from private debt to remain stable.

One of the most secure forms of private debt investing is mortgage debt, since you are investing in a tangible asset in a market that historically increases in value over time. This also helps to protect your investment from the impact of inflation. As the cost of living increases, interest rates go up, keeping your returns stable over time.

When compared to other property investments, private mortgage funds have minimal fees. Any fees associated with the mortgage are paid by the borrower, resulting in no tangible cost to the investor.

What to know about private debt investments

While investing in the private debt market can be one of the most effective foundations for your portfolio, especially when investing in mortgage debt, there are a few things to consider before committing.

High-net-worth individuals should be aware that private debt investments are not about capital growth. However, the diversification of your portfolio through consistent income generation is exactly what makes them an excellent addition to your investment strategy.

Another factor to consider is that a trustworthy private debt fund will require you to agree to a fixed amount of time, usually around 12 months, before you can withdraw your investment. This is because private debt investing is not about making short-term gains, but instead about receiving a fixed income over the investment term.

Finally, it is essential to choose the right Fund Manager when investing in private debt. The main risks associated with private debt can be easily reduced if the valuation of assets is taken seriously, with highly respected valuers involved and the right levels of compliance in place. Because of this, investing with unknown Fund Managers that do not have a proven record of results can pose substantial risks.

Private mortgage debt with Arthurmac

If you are going to invest in private debt, you will need a reputable Fund Manager that can show proven results over many years, especially during times of economic crisis. Arthurmac has over 20 years of experience with mortgage debt funds, with returns remaining steady even through the Global Financial Crisis and the COVID-19 pandemic. 

With the right Fund Manager, high-net-worth individuals can gain significant benefits from private debt funds. Australia is full of opportunities to strengthen your portfolio through calculated investments in private mortgage debt.

To learn more about how Arthurmac can help strengthen your portfolio through private mortgage funds, get in touch with our team on 1300 417 690 or complete our contact form today.


Disclaimer: Please be advised that it is highly recommended to conduct thorough research and seek guidance from a financial expert prior to making any investment decisions. It is further recommended to regularly review your investment portfolio and make necessary adjustments to ensure it aligns with your financial goals.

Stuart Styles

Managing Director Stuart has 16 years of experience as a Financial Services professional having worked previously in asset finance & management roles within the Motor Industry.