Tanarra Capital positions Violeta Kelly to front long-dated debt fund

The John Wylie-backed investment firm says its new product armed with funding from rich families and super funds will allow companies to hit their net zero ambitions.

The John Wylie-backed Tanarra Capital has launched a $1bn fund which promises high single-digit returns by tapping into superannuation funds’ and family offices’ demand for long dated debt.

Tanarra Capital has tapped Violeta Kelly to lead the new offering as head of long-term debt and debt advisory after joining in April from investment bank Grant Samuel.

Its pitch is different to the private credit space by underwriting longer-term loans for both public or private investment-grade companies which have either had to go to banking giants or look overseas to Europe or the US for capital.

Ms Kelly told The Australian Tanarra saw a gap in the Australian debt capital markets for long dated debt and expected it to be appealing to businesses looking for funding to achieve net zero ambitions.

“Three trillion dollars is required to decarbonise Australia and to meet our net zero commitments,” she said.

“We need to unlock greater pools of capital to do that. If a company is borrowing at the banks, they’re borrowing from offshore investors. And here’s an opportunity for them to borrow through us, through access to superannuation money and other investors who are motivated.”

Tanarra’s new offering aims to write $100m to $150m cheques with maturity schedules between seven and 12 years. It expects businesses operating in healthcare, telecommunication, energy and the services sector will look to the product for financing.

While the country’s major banks lend to low risk regulated utilities and infrastructure companies or ASX 50 companies, those which sit at the lower end of the spectrum have struggled to raise debt.

“Right now companies who need access to debt financing will typically go to the US private placement markets or other listed bond markets,” Ms Kelly said.

“A lot of borrowers are very supportive of this and are welcoming and want to see this type of product come into the market.”

Ms Kelly said the new fund had targeted superannuation funds as the key investor of the scheme given the longer term duration it offered, as well as it being a more defensive asset class.

“We’re targeting the long end of the curve as this asset class and this product in our view fits nicely and neatly with a need from the super funds to provide transition to retirement products,” she said.

“As an ageing population, their strategies have had to and will need to change to provide more annuity style defensive products. And that fits quite neatly into that strategy as their super portfolios do need to think about more defence annuity style investment opportunities.”

Tanarra is an Asia Pacific diversified alternative asset investment firm headquartered in Australia, managing $3bn in assets.

Mr Wylie, who founded Tanarra, ran Credit Suisse in Australia and was a key figure in the privatisation of Qantas.