Channel Capital’s West Street European Private Credit Fund (AUD) is an open-ended Australian unit trust that has access to Goldman Sachs Asset Management’s European private credit strategy, which was introduced to offshore wealth markets in late 2023.

According to the asset manager, the fund aims to provide risk-adjusted returns through exposure to directly originated senior secured debt with borrowers.

In addition, its focus is on high-quality mid- to large-cap companies with stable cash flows and leading market positions in recession-resistant industries such as healthcare and software.

Channel Capital noted that Goldman Sachs Asset Management's private credit business is one of the largest private credit platforms in the world with over $110 billion in assets in direct lending, mezzanine debt, hybrid equity and asset-based lending strategies .

"We have been an active investor in European private credits since 1996. and we continue to see the market as a source of returns for investors,” said James Reynolds, global head of direct lending at Goldman Sachs Asset Management.

"Australian investors are increasingly interested in private lending opportunities internationally and through this fund from Channel Capital they will have access to the direct lending markets in Europe for diversification."

Describing European private credit as "far from a niche asset class", Luke Mandekich, co-head of distribution at Channel Capital, added that it offers exposure to a deep group of leading global businesses.

"Many large European companies in the portfolio generate a significant portion of their revenue outside of Europe, which contributes to portfolio diversification. The European private credit market is growing rapidly, driven by the demand for alternative sources of financing, creating a dynamic environment for investors," said Mandekic.

"West Street's European Private Credit Fund (AUD) provides an attractive opportunity for Australian investors to access a diversified portfolio underpinned by Goldman Sachs Asset Management's proven private credit platform, which leverages Goldman Sachs' extensive network and sourcing capabilities."

Commenting to InvestorDaily earlier this year, Pengana Credit chief executive and managing director Nahemiah Richardson said private credit had not played the same role in replacing bank finance in large segments of Australia's commercial lending market as it had in other global counterparts like Europe.

"It is very different in North America and Europe, where private credit plays a significant and important role in providing middle market borrowers and non-bank lenders with access to credit," Richardson wrote at the time.

At the beginning of the year, approximately 84% of middle market lending in the US and Europe was provided by private lenders and 16% by banks on a hold-to-maturity basis.