Investors

The NZ loan market provides investors with access to one the most attractive corporate insolvency and legal framework protections available globally.

Numerous NZ funds give investors access to fixed income, often in offshore jurisdictions. Most investors don't need to be exposed to the additional currency risk that comes with investing in foreign securities. They certainly do not need to be exposed to lending or securities that are in a weak jurisdiction in terms of legal and creditor protection. Often those assets are additionally skewed towards fixed interest exposures, market’s with acute competition or to structures with fund level leverage; these all expose investors to incremental levels of risk and increase the potential for capital loss. 

The majority of NZ companies do not have a credit rating, can not generally access bond markets and have historically been heavily reliant on domestic banks. In an NZ market dominated by banks that are increasingly heavily regulated, bank balance sheets have become increasingly restricted. As a private lender, PCG is able to more efficiently deploy capital, take advantage of its experience in working through bank disintermediation and to provide borrowers access to finance tailored to the characteristics of each situation. Through these transactions investors are able to gain access to differentiated, NZD denominated assets which might favourably replace those typically made in offshore markets where non bank lending competition is high, terms aggressive and risk:reward compromised.

Loans are legally enforceable financial contracts. As such there is no dispute about what a company's obligation is to service its debt and repay its debt on maturity. Unlike other asset classes where there is disparity and divergent views on valuation, the biggest driver of risk for an investor in Private Debt is the risk of a default and the risk of a credit loss in the event of a default. Therefore, the fact that these are financial contracts that impose an obligation on a company, combined with the protective nature of NZ corporate insolvency laws, ensures that directors often will take proactive steps to manage their own personal risk. This results in a very strong alignment between a debt provider and the interests of equity and its management.

We only make loans to businesses with a significant proportion of their operations in NZ. If we can not easily walk past, enter the business and speak with management, we simply do not invest. NZ managers that are immersed in the day to day of the NZ economy and have strong local networks, are an integral part of the NZ business ecosystem.