Private Credit Funds in New Zealand: A Comparison Guide for Wholesale Investors

Private credit has become an increasingly significant asset class for wholesale investors in New Zealand, driven by regulatory changes affecting bank lending and growing investor appetite for yield. This guide provides a factual overview of private credit funds available to wholesale investors—it is not financial advice, and you should conduct your own due diligence before making any investment decisions.

What is Private Credit?

Private credit (also called private debt or direct lending) involves non-bank lenders providing loans directly to businesses. Unlike public debt markets where bonds are traded, private credit involves negotiated loans that are typically held to maturity by the lender.

Why private credit has grown in NZ:

• RBNZ capital requirements (effective 2026) have tightened bank lending to sub-investment-grade borrowers
• Banks have reduced appetite for smaller, more complex transactions
• Businesses seeking flexible financing structures not available from banks
• Investor demand for yield above term deposits with different risk characteristics

Types of Private Credit Strategies

Private credit encompasses several distinct strategies with different risk-return profiles:

Strategy	Description	Typical Security	Risk Profile
Senior Secured	First-ranking loans with priority claims	First charge over assets	Lower
Unitranche	Blended senior and subordinated debt	First charge, higher leverage	Medium
Mezzanine	Subordinated to senior debt	Second ranking or unsecured	Higher
Asset-Backed	Loans secured by specific assets	Equipment, receivables, inventory	Varies
Special Situations	Distressed or opportunistic lending	Various	Higher

Private Credit Funds Available to NZ Wholesale Investors

The following section provides factual information about private credit funds that accept wholesale investors in New Zealand. This is not a ranking or recommendation—funds are listed alphabetically. Information is based on publicly available data and may not reflect current terms.

Aotea Asset Management (AAM)

Focus: Corporate and leveraged finance transactions

• Strategy: Direct lending to corporate borrowers across various industries
• Team background: Experienced in originating and structuring corporate finance through multiple credit cycles
• Deal sourcing: Relationships with private equity sponsors, corporates, banks, and advisors
• Wholesale only: Yes

Note: Specific fund terms, minimums, and current performance should be verified directly with AAM.

Fisher Funds - Private Debt Fund

Focus: Australasian private debt

• Strategy: Diversified private debt across Australia and New Zealand
• Target return: Publicly stated target of 3% above the OCR (verify current target)
• Manager: Fisher Funds, one of NZ's largest fund managers
• AUM: Reported approximately NZ$120 million invested (as of available data)

Note: This fund may have specific investor requirements. Contact Fisher Funds directly for current terms.

Hunter Private Credit Fund

Focus: Diversified private credit segments

• Launch: February 2025
• Strategy: Exposure across bilateral SME lending, leveraged loans, asset-backed lending, business equipment receivables
• Risk profile: Typically exposed to sub-investment grade borrowers (higher default risk)
• Manager: Harbour Asset Management Limited
• Access: Currently available through JBWere NZ and Jarden Wealth
• Regulatory: FMA exemption granted for certain disclosure requirements (2025)

Note: Sub-investment grade lending carries materially higher risk. Verify current terms and access requirements.

Hunter Diversified Private Credit Fund

Focus: Non-bank lending exposure via direct and third-party managers

• Strategy: Diversified approach using both direct lending and investments in other managers' funds
• Risk profile: Described as moderate risk relative to longer-dated illiquid strategies
• Liquidity: Monthly subscriptions and redemptions (subject to terms)
• Manager: Harbour Asset Management Limited
• Access: Through JBWere NZ and Jarden Wealth

Newland Credit Fund

Focus: Working capital and growth loans to NZ businesses

• Strategy: Direct lending to New Zealand businesses
• Security: Secured by business assets
• Term: Medium-term focus
• Wholesale only: Yes

Note: Contact Newland directly for current fund terms, minimums, and availability.

Peninsula Credit Fund

Focus: Secured corporate lending to established NZ businesses

• Strategy: Direct, actively managed secured loans
• Borrowers: Established corporate New Zealand businesses
• Ownership: New Zealand owned and operated
• Wholesale only: Yes (FMCA Schedule 1 requirements apply)

Note: Multiple fund vintages may be available. Verify current offering and terms directly.

Pallas Capital

Focus: Commercial Real Estate (CRE) debt across Australia and New Zealand

• Track record: A$8.4 billion in total investments managed since 2016
• Current AUM: A$3.5 billion in open and performing investments across 300+ transactions
• Strategy: Institutional-backed lending for commercial and residential assets and development projects
• Geographic focus: Trans-Tasman (Australia and New Zealand)
• Wholesale only: Yes (products available only to wholesale clients under FMCA and Australian equivalent)

Available funds (indicative terms—verify directly):

• Pallas PFTNZ Feeder Fund: First mortgage fund targeting ~7% p.a.; 62.7% weighted LVR; 3-month redemption
• Pallas Senior Mortgage Fund: First mortgage fund targeting ~7.5% p.a.; 67.5% weighted LVR; 6-month redemption
• Pallas High Yield Mortgage Fund: First and second mortgage fund targeting ~11% p.a.; 75% LVR limit; 12-month redemption

Note: Pallas Capital claims no loss of principal capital or interest on their investments to date, though past performance is not indicative of future results. Verify current fund terms and availability directly with Pallas Capital NZ.

Pioneer Capital - Private Debt

Focus: Private debt alongside private equity investments

• Track record: Established 2005, over $1.2 billion wholesale capital raised to date across all strategies
• Strategy: Private debt as part of broader private capital platform
• Team: Experienced NZ-based private capital investors
• Wholesale only: Yes

Note: Pioneer offers multiple fund products. Verify which funds are currently open to new investment.

Private Capital Group (PCG) - Diversified NZ Private Debt Fund

Focus: Corporate private debt to NZ businesses

• Strategy: Senior secured direct lending to New Zealand businesses
• Structure: Wholesale, open-ended fund
• Target return: Historically stated as OCR + 4% (verify current target)
• AIP eligible: Yes—longest-running credit fund on NZTE Active Investor Plus programme
• Access: Direct investment or via wealth management/immigration advisory firms
• Recent: Aurora Capital (KiwiSaver provider) became an investor

Note: PCG is considered a specialist NZ domestic private debt manager. Verify current terms directly.

Key Considerations When Evaluating Private Credit Funds

1. Credit Quality and Underwriting

• What is the manager's track record through credit cycles?
• What are the underwriting criteria and credit processes?
• What is the default history and recovery experience?
• Are loans investment grade or sub-investment grade?

2. Security and Recovery

• What security is taken over borrower assets?
• What is the loan-to-value or loan-to-enterprise-value ratio?
• Are there personal guarantees from directors?
• What is the enforcement and recovery process if borrowers default?

3. Liquidity Terms

• What is the redemption notice period?
• Are there redemption gates or suspension provisions?
• How frequently can you redeem (monthly, quarterly, annually)?
• What happens to redemptions if fund liquidity is stressed?

4. Fees and Costs

• Management fee (typically 0.75%-1.5% p.a.)
• Performance fee (if any, and how calculated)
• Entry/exit fees
• Underlying transaction costs

5. Portfolio Construction

• How diversified is the loan book by borrower, industry, and geography?
• What is the average loan size relative to fund size?
• What concentration limits apply?

Data Limitations

Wholesale investors should be aware that private credit funds have limited disclosure requirements compared to retail funds:

• No PDS requirement: Wholesale funds are not required to produce Product Disclosure Statements
• Variable reporting: Performance reporting frequency and detail varies by manager
• Valuation complexity: Loan valuations are based on manager assessments, not market prices
• Comparability challenges: Different funds may calculate returns differently
• Borrower confidentiality: Some funds have exemptions from disclosing borrower details

Questions to Ask Fund Managers

Before investing, consider asking:

1. What is your historical default rate and loss rate (not just default)?
2. How do you stress test the portfolio for economic downturns?
3. What is your largest single borrower exposure as a percentage of the fund?
4. How are loans valued and how frequently?
5. What redemption requests have you received and how were they handled?
6. Have you ever gated or suspended redemptions?
7. What is your team's experience through the GFC and other credit events?
8. How do you source deals and what is your competitive advantage?

Market Context: 2025-2026

The NZ private credit market continues to evolve:

• RBNZ capital requirements: Banks face a 2026 deadline for increased capital ratios, potentially reducing bank lending capacity
• Market growth: Local private credit funds typically range from NZ$50 million to NZ$300 million
• Deal sizes: NZ-based funds typically focus on NZ$5-30 million transactions
• Institutional interest: Growing but NZ institutions are still becoming familiar with the asset class
• Australian competition: Large Australian funds are increasingly active in NZ transactions

Conclusion

Private credit offers wholesale investors an alternative source of yield with different characteristics to traditional fixed income. However, it comes with complexity, illiquidity, and credit risk that requires careful evaluation.

Key takeaways:

• Private credit is not a homogeneous asset class—strategies vary significantly
• Manager selection and due diligence are critical
• Understand the liquidity terms before committing capital
• Past returns may not reflect current market conditions or future performance
• Verify all information directly with fund managers before investing