Sunday 31st August 2025
The steady hand in volatile markets
The appeal of private credit starts with its ability to strip away the day-to-day distractions that plague public markets, says Andrew McVeigh, managing partner at Remara.
Andrew McVeigh, managing partner at Remara, put advisers on the spot at The Inside Network’s Income & Defensive Symposium, by contending that they are often forced into short-term thinking by volatile equity and bond prices. But he came with a solution. “If you are advising clients to build wealth over the long term, you want stable income without distraction, month-in, month-out,” he said, “and you get that from well-structured, investment-grade credit”.
McVeigh contrasted the constant market ‘noise’ of public assets with the steadier journey of private credit. In public markets, sentiment swings, political headlines and macro shifts can send portfolios sharply up or down. In crises, apparent liquidity vanishes and selling becomes costly. By comparison, private credit’s absence of daily pricing, and its floating-rate structure, can cushion capital values while still delivering consistent yield.
That consistency, however, does not mean a portfolio should be entirely in private assets. McVeigh acknowledged the cyclical opportunities in public fixed income, but said they belong in smaller, tactical allocations. When rates rise sharply, capital values in fixed income can be hit hard. Floating-rate private credit “bleeds” over time as rates change, affecting yield rather than causing immediate capital losses, and giving investors the option to exit or reallocate.
Liquidity is often the sticking point for advisers considering private markets. McVeigh urged them to start by asking what type of liquidity is truly needed, and when. In his view, the most valuable liquidity is during market dislocations, when opportunities arise in public markets and the ability to redeploy capital quickly can add value.
Remara’s approach centres on securitised construction and asset-backed credit, which McVeigh described as “self-liquidating” structures. Principal and interest are paid monthly, with weighted average lives of around two-and-a-half years for common assets like trucks or cars. Portfolios are highly granular, in Remara’s case backed by more than 27,000 individual loans across vehicles, equipment and property. This granularity spreads risk and generates a constant flow of capital back into the portfolio.
That liquidity is reinforced by a functioning secondary market. While large, single-asset property loans can be hard to exit, warehouse notes and securitised tranches can be repackaged and sold to other institutional investors. “Even though they might be private in nature, there is a liquid market there,” McVeigh said.
McVeigh highlighted the scale and maturity of Australia’s securitisation market, which now has roughly $250 billion outstanding and annual issuance approaching $100 billion. Post-GFC regulatory changes have pushed banks away from certain lending activities, creating room for non-bank lenders. McVeigh sees this structural shift as a long-term driver of growth in private credit.
Geographically, Remara remains focused on Australia, which he described as having a softer business cycle than the US or Europe. “We do not have the same peak-to-trough movements,” he said, arguing that while credit investors miss out on some upside in more volatile economies, they also avoid much of the downside. Strong fundamentals, steady demand and a robust borrower base support the domestic opportunity set.
Portfolio construction is about balancing stability and growth. McVeigh outlined how mixing asset-backed finance with direct lending can create a spectrum of risk and return, from investment-grade tranches to equity-like credit opportunities. In Remara’s flagship mix, around 80 per cent is asset-backed finance and 20 per cent is direct loans, giving both granularity and scope for higher-return allocations.
The benefits of adding private credit to a traditional equity and bond portfolio, he said, are higher returns with lower volatility. But it requires patience. “You should not be looking at private credit if you or your client need the money back in six months,” McVeigh warned. The asset class works best for medium- to long-term allocations, compounding income and returns over years.
Looking ahead, he sees challenges in sourcing assets as more managers enter the private credit space. Access, alignment and origination capability will be critical. Remara’s edge, he argued, lies in being able to generate assets internally, retain risk alongside investors, and deploy capital across the full spectrum of credit opportunities.
For advisers, McVeigh’s message was clear. Private credit will not replace public markets, but in a diversified portfolio it can be a low-maintenance anchor, delivering stable income, reducing volatility, and freeing both clients and advisers from the short-term noise that too often derails long-term plans.
Laurence Parker-Brown is head of content at The Inside Network and managing editor of The Inside Adviser and Investor Strategy News.
