The Manning Credit Opportunities Fund delivered +1.12% in June and 13.17% over the past 12 months. Since inception, the Fund has delivered an annualised return of 14.55%, continuing to exceed its objective of net returns of over 10% above the RBA cash rate.
Portfolio Activity
Five existing lenders drew on their facilities during June, reflecting continued activity across the portfolio and the depth of our long-standing lending relationships. The portfolio continues to perform in line with expectations, supported by a diversified range of asset-backed facilities and consistent underlying borrower performance.
One aspect of the Fund that is often less visible is the level of ongoing portfolio activity. While new drawdowns naturally receive attention, capital is also continually being repaid and reallocated as underlying borrowers repay or refinance their loans and our non-bank lenders recycle capital through their funding facilities. This creates an active portfolio, with capital continually being redeployed into opportunities that meet the Fund’s return and risk requirements.
Maintaining the Fund's Return Profile
The Fund has a relatively high target return and, by extension, a comparatively high cost of funds. Maintaining this return profile requires the continual sourcing, assessment and execution of new opportunities, even when the portfolio is performing in line with expectations.
While the current market continues to present attractive opportunities, only a relatively small proportion ultimately meet the Fund's credit, structural and return requirements. Our focus remains on identifying transactions where structure, security and pricing combine to deliver attractive risk-adjusted returns, rather than deploying capital simply to increase portfolio size.
Consistent with this, we are seeing an increasing number of opportunities secured by real property. The Fund's broad mandate allows us to assess opportunities across multiple segments of the credit market as relative value evolves.
Outlook
The pipeline remains healthy and we continue to progress a number of opportunities through various stages of due diligence and structuring. As always, deployment will remain selective, with capital allocated only where opportunities meet the Fund's disciplined credit standards and risk-adjusted return requirements.
