PCG News: A Private Debt Market for a Sustainable Aotearoa, NZ

Climate and Energy Finance Group (CEFGroup)'s new report, in collaboration with Griffith University, MyFiduciary Limited, and Private Capital Group, sheds light on developing a private debt market in Aotearoa New Zealand.

The aim of the survey is to understand the opportunities and barriers associated with developing a private debt market in New Zealand, and to elicit respondents’ views on how private debt can support the transition toward sustainability.

• There is increasing interest in private debt (PD) among both PD and non-PD investors. PD is poised to grow further in the near future.
• PD investors have had a good experience to date, and most are optimistic about PD’s growth potential.
• In New Zealand (NZ), PD is an under-utilised investment asset relative to the scope to invest.
• Main reasons for not investing in PD, among NZ respondents, are lack of experience, lack of liquidity and size of the market.
• Compared to the UK, PD market in NZ is still in its infancy, with many investors yet to make their first commitments to the asset class.
• NZ respondents prefer more conservative PD instruments characterised by lower risk.
• PD investors, on average, are greater advocates of responsible investing.
• Respondents, especially those that have had PD investments, think that it is a lot easier to achieve ESG and impact goals in private markets than in public markets.

Authors

Renzhu ZHANG

Strategic Postdoctoral Fellow, CEFGroup

Paul CARMAN

Founder and CEO, Private Capital Group

Ivan DIAZ-RAINEY

Professor of Finance, Griffith University Honorary Professor, University of Otago

Greg PEACOCK

Principal, MyFiduciary

Amanda SIM

Master of Finance Student, CEFGroup