In our various overseas meetings over the past six months with institutional investors in the Middle East, Japan, UK, Germany, Belgium, Switzerland, Singapore and, most recently, Australia, consistent themes arise. The virtues of private credit are generally well appreciated, particularly in light of recent interest rates that have lifted all-in returns to historic highs.

But each region comes at their views of the asset class from different perspectives depending on how developed it is relative to public strategies. In MENA and APAC banks dominate lending, while the EU and UK have seen more disintermediation to private debt over the past decade.

But the story of institutional investing in Australia is superannuation funds. These public pension vehicles – almost fifty in number, with fourteen major ones [Chart of the Week]– have generally replaced what in the US would be state retirement funds. The majority of the largest superannuation funds have exposure to direct lending, including AustralianSuper, CBUS Super, HESTA and ART.