AltX Group Co-CEO and Co-Founder Nick Raphealy speaks to AusBiz's Juliette Saly on why private debt investors are less worried about a market correction including why might investors consider reallocating their assets to include private real estate debt in their portfolios.

Key points:

• Nick Raphaely discusses AltX Group's role in the private real estate debt market

• Offers his views on investor diversification against potential market correction fears

• Advocates for skilled transaction management to protect investors in private real estate credit

Nick Raphaely, co-CEO of AltX Group, explains how his company functions as an integrated alternative investment manager focused on private real estate debt. The company, which originated circa $5 billion of transactions for investors since its inception in 2012, brings together loan transactions that do not align with bank criteria and investors seeking potential opportunities.

Nick asserts that recent developments in the private real estate credit space are attracting increasing interest from investors amid macro uncertainties and fears of an equity market correction. Nick shares that in a recent internal survey, a significant proportion of AltX Group's investors revealed concerns about an equity market correction, given geopolitical tensions, inflation, rising interest rates and anticipated pressure on corporate earnings.

Against this backdrop, many are considering diversification of their portfolios. Nick points to private real estate credit as an attractive option for those seeking simplicity and direct line of sight to their investment, as well as headroom or capital protection. Addressing concerns of risk management, Nick reasons that working with a skilled and experienced transaction manager, such as the AltX Group, offers additional protection for investors. He highlights that an experienced manager would control the transaction and investment, ensuring borrowers' compliance with loan agreements, thereby prioritising investor protection. While acknowledging that private real estate debt investments do not offer the potential for significant growth, Nick sees their steady, predictable returns as alluring for investors seeking to balance their portfolios amid market disruptions.

Published by ausbiz on 15th April 2024.