In a recent fireside chat, Ryan Donnar and Atiya Habib, Managing Partners and Members of the Investment Committee at Dinimus Credit Fund (DCF), shared their expert insights on the evolving landscape of private credit. Hosted by Giovanni Amodeo, the discussion delved into various aspects of private credit, focusing on the Australian and New Zealand markets.

Key Topics Discussed:

Introduction to Dinimus Credit Fund (DCF):

• Overview: DCF is a direct lender specializing in medium-term senior secured loans to midcap corporates in Australia and New Zealand.
• Track Record: With over 10 years of operation, DCF has lent around $800 million across four funds, offering double-digit returns and dependable cash yields to investors.

Experience and Background:

• Atiya Habib: Over 25 years in private markets, with expertise in structured lending, acquisition finance, and infrastructure debt.
• Ryan Donnar: 20+ years in international markets, focusing on mid-market originations, restructuring, and infrastructure.

Economic Cycles and Market Resilience:

• Historical Context: Discussion on past economic cycles, including the Asian banking crisis, the dot-com crash, and the Global Financial Crisis (GFC).
• Current Market Position: Insights into how DCF has been preparing for potential economic downturns, emphasizing conservative structuring and risk management.

Impact of Global Economic Trends:

• US and Australian Markets: Analysis of how global economic trends, particularly from the US, impact the Australian market.
• Recession Preparedness: Strategies employed by DCF to navigate potential recessions, including maintaining flexibility in cost structures and focusing on mid-market private companies.

Private Credit Market in Australia:

• Growth and Opportunities: The Australian private credit market is in its early growth stages, presenting significant opportunities for investors.
• Bank Retrenchment: The role of banks retrenching from structured space and the rise of private credit providers offering customized solutions.

Investor Perspectives and Market Differentiation:

• Capital Preservation: Emphasis on downside protection and capital preservation as key investor requirements.
• Dependable Yield: The importance of providing a reliable yield to investors, supported by robust risk management and transparency.
• Independent Ratings: The role of independent ratings in providing additional comfort to investors.

Future Trends and Industry Dynamics:

• Insurance and Sovereign Wealth Funds: The growing involvement of insurance companies and sovereign wealth funds in private credit.
• Talent Acquisition: The need for experienced professionals with backgrounds in investment banking, restructuring, and private credit.
• Market Consolidation: Expectations of consolidation within the private credit market, driven by both acquisitions and partnerships.

Conclusion: The fireside chat with Ryan Donnar and Atiya Habib provided valuable insights into the private credit market, highlighting the strategic approaches and market dynamics that define DCF’s operations. Their expertise underscores the importance of conservative risk management, investor-focused strategies, and the evolving opportunities within the Australian private credit landscape.

Key Timestamps:

00:09 Introduction to the Fireside Chat
02:05 Background of the Speakers
03:01 Understanding Economic Cycles
06:56 Consumer Behavior in a Potential Recession
09:11 Comparative Analysis of Economic Cycles
11:59 The Role of Banks in Private Credit
15:35 Differentiating in a Crowded Market
18:29 Investor Perspectives on Private Credit
21:29 Trends in Private Credit Investment
22:34 Talent Acquisition in Private Credit
23:45 Future of Private Equity Strategies
25:07 Addressing Risks in Private Credit