Evergreen Ratings, which specialised in rating alternatives funds, has awarded a ‘commended’ rating to the private debt Wentworth Williamson Stable Income fund.
The fund specialised in funding non-bank lenders and launched in 2018, targeting an income return of the bank bill swop rate plus 6% (net of fees of 1%).
Evergreen said it had a “very high degree of conviction” that the fund would be able to reach those targets. It also highlighted the fund’s security over its financing was “extremely strong” as it was based on personal guarantees, collateral over financed items and life insurance.
The ratings house also had a positive view on Australian private debt as an asset class, saying more domestic borrowers were now seeking funds from outside traditional banking sources.
“The market dynamics are supportive of attractive risk-adjusted loan pricing which presents an opportunity for a capital provider to earn excess returns,” chief executive Angela Ashton said.
“We do not believe the fundamentals of this market in Australia will deteriorate over the foreseeable future.”
Rob Hamer, portfolio manager at boutique firm Wentworth Williamson, said the fund was designed to provide risk-adjusted stable returns in the form of a monthly payment.
“Our value proposition focuses on specialised non-bank lenders and other opportunities where the provider has a right to win and where our clients are afforded strong first loss protection,” he said.
“We believe this product should fit nicely as part of a portfolio as a diversifier away from traditional bank hybrid and other domestic property focused income exposures.”