Over the past decade, private credit has moved from a niche corner of the market into a mainstream source of funding across the globe. In Australia, this asset class is coming of age, reshaping how capital flows into real estate, infrastructure, and the broader economy. The story is not just about growth—it’s about what private credit represents, both for investors and for the communities who ultimately rely on the projects it funds.
A market shift that was long in the making
The rise of private credit in Australia didn’t happen by accident. Regulatory changes curtailed the lending appetite of traditional banks, leaving developers and businesses searching for alternative sources of finance. Into that space stepped specialist managers like Zagga, focused on commercial real estate credit.
Today, private credit accounts for around 17%1 of the Australian commercial real estate debt market. Compare that with the US (above 50%) and the UK (35%), and it becomes clear just how much room this asset class has to expand domestically. Against the backdrop of a housing shortage, population growth, and ongoing infrastructure needs, the opportunity is structural, not cyclical.
The case for collaboration
What sets private credit apart is that it can be more than a transaction. Done well, it creates genuine partnerships—between investors, managers, and borrowers—built on alignment of interests.
That alignment is crucial. Investors are looking for steady, risk-adjusted returns in an environment where traditional 60/40 portfolios are under pressure. Borrowers, meanwhile, need capital partners who can provide certainty, expertise, and understanding of the real asset risks they face. When both sides are served, value compounds across the system.
Discipline in an expanding market
As private credit grows in popularity, competition is intensifying. More players are entering the field, and more capital is chasing deals. In this environment, discipline becomes the differentiator.
Zagga’s track record—over 300 transactions, with more than 225 successfully exited—demonstrates the power of rigorous credit processes, both quantitative and qualitative. But discipline isn’t static; it requires constant refinement. For investors, this means preservation remains front and centre. For borrowers, it means transparent, consistent, and well-structured solutions.
Lessons from Moneyball
If there’s a metaphor for how Zagga approaches private credit, it might just be the film Moneyball. The lesson isn’t about glamour or headlines; it’s about applying fundamentals, using data, and building the right culture to deliver consistent outcomes.
Like Billy Beane’s Oakland A’s, the success lies in identifying value others might overlook, being relentless about process, and trusting a team culture built on execution. For private credit, that means being both investor-first and borrower-aware—balancing prudence with opportunity.
Why it matters
Private credit is not simply another asset class. In Australia, it has the potential to be a cornerstone of how we meet long-term housing, infrastructure, and community needs—while also providing investors with determinable, defensive returns.
For investors considering diversification, for developers searching for capital, and for communities in need of new housing and facilities, private credit is no longer optional. It’s part of the future of Australia’s funding landscape.
- Alvarez & Marsal Research Report, 2024
