Many Australians already invest in global markets through shares and superannuation, but when it comes to income-focussed investments, portfolios often stay much closer to home. Here’s why some investors are starting to look further afield.
For many Australians, generating reliable income from investments has become increasingly tricky. On one side sits the relative stability of cash. On the other, the higher growth potential and volatility that can come with shares, and the concentration risk that comes with investing only in the domestic market.
But there’s another asset class gaining serious momentum: global private credit.
While many Australians may be unfamiliar with the sector, the concept itself is relatively straightforward. Instead of investing in shares in a company, global private credit involves investing in loans made to businesses, with investors earning income from the interest paid on those loans.
A growing number of investors are looking beyond Australia for those opportunities.
“Australians are already comfortable investing in global companies on the share market,” says Nehemiah Richardson, CEO and managing director of online term account platform, TermPlus.
“The global private credit market follows a similar idea, but instead of buying equity in businesses, you’re investing in loans made to mid-market corporations, and benefitting from their contractual and secured nature.”
Unlike shares, global private credit investments aren’t typically exposed to the same day-to-day swings of the share market. That can mean very little short-term volatility during uncertain periods.
Australian private credit is smaller. Globally, it’s a different story
Private credit already exists in Australia, but it’s relatively small and generally heavily concentrated in property-related lending.
“Locally, Australian private credit only makes up about 10 per cent of the lending market, typically concentrated in property,” Richardson says. “Globally, it’s a far broader, more mature market, offering greater potential for diversification.”
That scale has helped global private credit become one of the fastest-growing asset classes internationally over the past decade. According to Morgan Stanley, the global private credit market grew from around US$2 trillion in 2020 to approximately US$3 trillion at the start of 2025, with estimates it could reach around US$5 trillion by 2029.
Globally, private credit markets span thousands of corporate loans across mid-market companies across various industries and regions, particularly in the US and Europe. For investors, that breadth can provide exposure to a much more diversified range of businesses and economic conditions than Australia’s smaller market alone.
Much of the growth in global private credit followed the global financial crisis, when tighter banking regulations changed how traditional lenders operated in corporate lending markets.
The shift also opened the door for global private credit providers to finance established businesses pursuing expansion, acquisitions and other strategic projects.
At the same time, investors searching for more reliable income sources increasingly began looking beyond traditional fixed-income products.
How everyday Australians can access global private credit
Historically, large institutional investors, pension funds and insurance companies dominated global private credit markets. High minimum investment requirements, complex capital management and the barriers to accessing overseas markets meant it was difficult for everyday Australians to participate.
In recent years, online investment platforms have made the asset class more accessible.
Platforms like TermPlus now offer Australian investors access to diversified global private credit portfolios through one, two or five-year term accounts.
“Everyday investors can now earn income from the interest paid by those companies, on those loans,” Richardson says.
TermPlus Term Accounts are designed to provide reliable monthly income. Investors can choose to receive their target monthly income payments directly into their bank account or reinvest them for compounding growth over time. Target rates are set as a fixed margin above the RBA Cash Rate, which is variable over the course of the term.
Why global private credit is gaining attention
For many investors, the appeal isn’t necessarily about chasing the highest possible returns. For some, particularly those focused on retirement income, the relative reliability of global private credit can be reassuring.
Global private credit investments also sit higher in a company’s capital structure than shares, meaning debt holders are generally repaid before equity investors in the event a company experiences financial distress.
Of course, like all investments, global private credit still carries risk and won’t suit every investor. But as more Australians rethink how they generate income in retirement or alongside their SMSF strategies, global private credit is increasingly entering the conversation.
And for investors who have traditionally focused only on Australian opportunities, looking offshore may open the door to a much larger and more diversified market than they realised existed.
Find out more at termplus.com.au.
This article is brought to you by Your Money & Your Life in partnership with TermPlus.
