Good evening,

Sydney private debt house Revolution Asset Management has pulled the trigger on a new fund for the New Zealand market, where it already lends to classifieds giant Trade Me.

Revolution founders – Bob Sahota, Simon Petris and David Saija – have been meeting with Kiwi institutions, endowment firms and high net worth investors to build support for Revolution Private Debt PIE Fund (NZD). The fund feeds into the firm’s flagship Fund II, and is pitched as a tax-effective – maximum 28 per cent versus the 39 per cent top tax bracket – and currency hedged entry point for Kiwi investors.

Revolution has 14 per cent, or about $300 million, of its $2.2 billion Fund II ploughed into New Zealand companies. In addition to taking a slice of London PE investor Apax Partners′ debt financing for its $NZ2.6 billion buyout of Trade Me in 2019, it is a lender to Bluestone Home Loans, Humm NZ and Latitude Financial Services.

The team is scouring the country for new deals. It expects its exposure to New Zealand companies to grow from 14 per cent to about 20 per cent of Fund II’s portfolio.

“We think the biggest opportunity [in New Zealand] is in non-bank lender financing because there are much fewer players in mezzanine ABS, where we are specialists. In commercial real estate, many loans are development loans which we don’t invest in; and in LBOs many Kiwi companies are now too small because of our scale, where we need to do $30 million to $50 million for individual deals,” Sahota told Street Talk.

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Revolution Asset Management’s new fund is tracking at 5.8 per cent credit margin over the BKBM rate of 5.6 per cent, bringing gross yield to 11.4 per cent.

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