Why Durability Matters in Private Credit – and Why the La Trobe Financial 12 Month Term Account Is the Gold Standard

Why Durability Matters in Private Credit – and Why the La Trobe Financial 12 Month Term Account Is the Gold Standard

In today’s evolving private credit landscape, financial advisers are navigating a wave of new products, platforms, and providers. As banks retreat from traditional lending, non-bank lenders and asset management firms have stepped in, offering investors access to attractive yield opportunities. But with growth comes complexity, the potential of volatility, and a whole range of other considerations.

The Antidote to Volatility Is Durability

Market cycles are increasingly defined by disruption. Whether it’s economic shocks, geopolitical instability, or policy shifts, volatility is now a constant. For advisers, the antidote isn’t chasing returns – it’s investing in durability.

Durability means resilience. It means designing portfolios and selecting products that can withstand market stress and deliver consistent outcomes. And in private credit, durability starts with purposeful design.

Private Credit: Not One-Size-Fits-All

Private credit is not a single asset class – it’s a spectrum. From real estate-backed loans to corporate credit and structured finance, each segment carries distinct risk and return profiles. Advisers must understand:

• What type of private credit is being offered?
• How it behaves across market cycles?
• What risks are being taken to generate returns?

Alpha is attractive.  But in defensive allocations, risk-adjusted performance is paramount. Be wary of strategies that promise high returns, where marginal yields are achieved with greater step-ups in the risks.

Understand the Pedigree, Not Just the Pitch

The surge in commentary around private credit can give the impression that it’s a new, untested asset class. That’s simply not true.

Like any investment, advisers can assess a wide range of pedigrees, track records, and investment styles which are on offer given the proliferation of private credit providers, manager selection remains paramount to ensure multi-cyclical experience.

La Trobe Financial has been active in real estate private credit since 1952. With over $21 billion in assets under management and a consistent investment philosophy, our approach has been tested through major market cycles and crises.  Our products represent our views on the best way to extract durable returns from the asset class, without having to take on undue marginal risks.

The La Trobe Financial 12 Month Term Account: Built for Durability

Our flagship product, the 12 Month Term Account, exemplifies what durability looks like in practice. It offers:

• A diversified portfolio of over 12,000 loans
• A low average loan-to-value ratio (LTV) of 66%
• 96% of borrowers with no negative credit history
• Monthly income distributions which have consistently outperformed benchmarks
• A flawless track record with 100% of capital returned to investors across its 23 years of operation*
• A current variable rate of 6.00% p.a. after fees**

These aren’t just metrics – they’re the hallmarks of a product designed to deliver predictable, low-volatility returns through all market conditions.

Transparency and Risk Awareness Are Essential

As private credit evolves, new offerings may promise innovation – but advisers must demand transparency. Products should clearly disclose:

• Asset types and borrower profiles
• Investment mandate (and scope for mandate creep)
• Use of leverage
• Risk management strategies
• Historical performance and stress-tested outcomes

At La Trobe Financial, we embrace innovation without compromising on quality. Our upcoming Australian Real Estate Fund, Global Infrastructure Fund, and the recently ASX-listed La Trobe Private Credit Fund (ASX: LF1) reflect the same principles that have guided our success: high-quality assets, diversified portfolios with conservatism at their core.