Nuveen brings US private credit strategy to Australia
Nuveen is set to expand access to the Nuveen Churchill Private Credit Income Fund (PCAP) to Australian wholesale investors, noting “strong interest” from family offices and high-net-worth individuals for private markets solutions.
PCAP has been trading in the US since 2022 but will now be available to Australian investors via an Australian registered unit trust structure, with Channel Investment Management acting as the responsible entity and manager.
According to Nuveen, the fund has already secured early investment from a range of Australian wealth managers like Drummond Capital Partners, Stanford Brown, and Morrows Private Wealth.
It will invest substantially all of its assets in the Nuveen Churchill Private Credit Income Fund (PCAP), a perpetual life, non-traded investment vehicle that seeks to provide current income and attractive risk-adjusted returns from private capital investments in US middle market companies.
The fund provides wholesale investors with exposure to a diversified portfolio of predominantly private debt investments in US middle market companies owned by leading private equity firms.
“Australian wholesale investors looking to diversify their fixed income portfolios globally can find exposure to private credit markets overseas, particularly in the US,” said Kelli Marti, portfolio investment strategist of PCAP and head of collateralised loan obligation management at Churchill.
She noted the global private credit market now stands at more than US$2 trillion, having more than doubled since 2015 to rival the size of the US high yield bond market.
“As private credit markets continue to grow and become more diverse, the need for scale is only increasing as the requirement for significant infrastructure favours larger firms with the financial resources to support this complexity.
“In addition, private equity firms seek to partner with private capital managers with demonstrated scale and expertise,” Marti said.
As of 31 August 2024, PCAP has an investment portfolio valued at more than US $1 billion, holding some 230 companies in the portfolio across sectors like construction and building, healthcare and pharmaceuticals, technology and business services.
Andrew Kleinig, head of Australia at Nuveen, remarked that access to the benefits of private capital have “long been the purview of institutional investors alone”.
“The launch of the Nuveen Churchill Private Credit Income Fund is the latest step in Nuveen’s journey of unlocking the power of alternative and innovative investment solutions to, and beyond, its established institutional investor base,” Kleinig said.
“We are seeing strong interest from family offices, private wealth and high-net-worth individuals for private markets solutions as they seek solutions targeting diversification, low volatility and attractive risk adjusted returns.
“We believe Nuveen, via its private credit specialists Churchill and Arcmont and rich heritage in broader private markets investment, has the scale and proven track record to provide what investors need across the breadth of the distribution spectrum.”
Nuveen Private Capital was formed in March 2023, following Nuveen’s majority acquisition of Arcmont. Combined with Churchill, this gave rise to a US$75 billion private capital platform and one of the world’s largest private credit managers.
In the last 12 months to 30 September 2024, Churchill and Arcmont have collectively deployed over US$200 billion in support of US and European private equity firms and their portfolio companies.
AUTHOR
Rhea Nath
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