Australian corporate loan specialist, Metrics Credit Partners, has set sight on the NZ market with an Auckland office due to open shortly.
In a statement, Andrew Lockhart, Metrics managing partner, said the trans-Tasman foray was a response to high demand in NZ for alternative fixed income investments.
Lockhart said in the current ultra-low interest rate era New Zealanders are “losing money on every dollar they have invested in cash” after inflation..
“New Zealand investors, in particular retirees, are seeking consistent income with stability of capital,” he said.
“Adding a New Zealand office was a strategic move for us and a sensible one as we build on our capabilities as a leading non-bank corporate credit provider. We continue to grow and originate attractive investment opportunities for our investor clients.”
Launched by former National Australia Bank executives seven years ago, Metrics lends to Australasian corporations and property investors, bundling the loans (in tranches of up to 100) into listed and unlisted funds.
Targeting annual returns of between 4 to 10 per cent, Lockhart said the underlying loans have security arrangements on a par to bank lending standards.
He said corporate loans also offered portfolio diversification benefits, given the asset class is lowly-correlated with other investments such as equities and sovereign bonds.
Metrics has almost $5 billion in funds under management across a range of seven unlisted products and two ASX-listed investment trusts.
The manager will appoint “three local financial experts” to man the Auckland office, the Metrics statement says.
Metrics registered its flagship MCP Master Income Trust in NZ under trans-Tasman mutual recognition rules last week with the offer due to go live on February 13.
It is understood the group is also investigating the prospect of launching NZ-domiciled portfolio investment entity (PIE) products.
In 2018 the ASX-listed Pinnacle multi-affiliate group took a 35 per cent stake in Metrics after previously providing distribution services for the manager. Pinnacle counts 15 boutiques under its marketing, distribution and fund operations umbrella, including Antipodes, which has a strong following in NZ.
Late in 2017, Pinnacle hired, David Batty, as its NZ marketing representative.
Last week Pinnacle reported a half-year net profit of about $14 million, up almost 40 per cent compared to the previous period.
More than three-quarters of underlying Pinnacle manager money is sourced from institutional investors.
Pinnacle says it has helped underlying managers win institutional mandates from sovereign wealth funds, pension funds, private banks, and insurers over the last 12 months.