(Bloomberg) -- Nuveen LLC, the $1.3 trillion US global asset manager, is targeting wealthy Australian investors to tap into expected growth in the US private credit market via a new fund.
The firm has launched its Nuveen Churchill Private Credit Income Fund, aimed at Australian private wealth, high net worth individuals and family offices, according to a company statement. Through investment, participants will have the chance to invest directly into Nuveen’s global US master credit fund, accessing predominantly middle market corporate debt.
The US credit market is seen getting a boost from President-elect Donald Trump’s incoming administration, which will drive base rates higher and make US credit more attractive, said Mike Perry, Nuveen’s head of client group in an interview.
“It’s a combination of rates being higher for longer and as the economy grows, private equity largely is going to look to continue to finance and use debt to grow businesses,” Perry said.
US-based money managers, including Ares Management Corp., Blue Owl Capital LLC and Muzinich & Co. are increasingly promoting private-credit investments to wealthy Australians, a market that’s worth over $1 trillion, according to one estimate. They are selling private credit as a defensive investment against a potential stock market downturn, as the credit offers high returns in a period of elevated interest rates.
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Nuveen’s US master fund, launched in March 2022, is an open-ended vehicle with $1.5 billion of loans to private equity-owned firms in the US with earnings of between $20 million and $100 million, said Perry. Returns are between 10%-12%.
Perry sees further opportunity in the alternative credit market - strategies focused on investments in diversified portfolios. Nuveen manages $224 billion in alternative credit, including direct lending, leverage loans, real estate credit and energy and infrastructure credit, he added.
“In most markets, the penetration and allocation to non-correlated alternative investments is low,” Perry said. “For individuals, if they’re trying to save money to retire, this improves the risk adjusted return of those portfolios.”
Nuveen’s new Australian fund has secured early commitments from domestic wealth managers such as Drummond Capital Partners, Stanford Brown and Morrows Private Wealth, the statement added, without disclosing how much capital was raised.
