The Manning Credit Opportunities Fund delivered +1.01% in February (noting the 28 day month, this is equivalent to 1.12% for a 31 day month) and 13.68% over the past 12 months. Since inception, the Fund has delivered an annualised return of 14.63%, continuing to exceed its objective of net returns of over 10% above the RBA cash rate.
Interpreting Macro Conditions Through a Credit Lens
The macroeconomic backdrop remains a central focus for investors, with ongoing debate around the path of inflation, the trajectory of interest rates and the broader implications of geopolitical developments.
These factors have contributed to periods of volatility across global markets, particularly within publicly traded credit. Spreads have moved wider (from historically tight levels) in response to shifting rate expectations, liquidity conditions and investor sentiment, often adjusting rapidly as new information is incorporated.
While highly responsive to macro inputs, this shift is less a reflection of a deterioration in underlying credit quality and more a repricing of uncertainty across rates, inflation and broader market conditions. While these dynamics are highly visible, their transmission into private and structured credit markets is less direct.
How Macro Conditions Flow Through Credit Markets
By contrast, private and structured credit transactions are negotiated, structured and executed over extended periods. Pricing is not reset continuously; instead, it is determined through bilateral or multi-party processes that reflect asset characteristics, structural protections, and counterparty requirements.
This distinction matters. It means that while macro conditions influence an opportunity, they do not translate one-for-one into existing exposures. Instead, they tend to manifest in new transaction pricing, structure, and availability, rather than in the immediate repricing of a portfolio.
Implications And Opportunity
Periods of macro uncertainty can create divergence across credit markets.
In more liquid and commoditised segments, increased volatility can compress activity or lead to short-term dislocations driven by sentiment rather than fundamentals. In more complex, less intermediated transactions, the effect is often different.
Lenders continue to require stable, long-term funding partners. Where capital becomes more selective or constrained, the ability to provide certainty of execution becomes more valuable. This can translate into improved structuring terms, stronger protections and more attractive pricing for investors able to underwrite complexity.
For the Credit Opportunities Fund, these conditions are typically where the most compelling opportunities arise — not through broad market movements, but through selective transactions in which structure, control, and pricing can be negotiated directly.
Discipline Through the Cycle
While the macro environment remains uncertain, our approach is unchanged.
We continue to focus on transactions where risk is clearly defined through structure, where cashflow generation is governed by contractual mechanisms, and where pricing appropriately reflects complexity and control.
As always, deployment remains selective. The objective is not to respond to short-term market movements, but to take advantage of conditions where they create structural opportunities consistent with the Fund’s return profile.
The portfolio continues to perform in line with expectations.
