‘Go big or don’t worry about it’: Australian private credit is still searching for its AI angle

Australian private credit managers are still seeking a route to exposure to the artificial intelligence boom, even as lenders worldwide reassess the risks tied to the data centre rollout following the failed float of Firmus, according to Capital Brief. Unlike the United States, Australia's private credit market, valued at about $200 billion, remains primarily oriented toward real estate, which accounts for 40% to 60% of fund exposure, according to data from the Australian Securities and Investments Commission.

The largest local funds have largely avoided the volatility seen elsewhere. They sidestepped the so-called SaaSpocalypse earlier this year, which hit large Wall Street firms such as Blue Owl Capital, and have been less exposed to growing concerns over the viability of some data centre developers as interest rates continue to rise. However, Capital Brief's enquiries found that many of Australia's largest private credit managers, including Metrics Credit Partners, Qualitas, MA Financial, Revolution Asset Management, Merricks Capital and Centuria, have yet to lend directly to companies across the AI value chain.

Alceon chief executive David Gribble told Capital Brief that local players are not missing out on data centre lending because of unwillingness, but because the debt required to build data centres is very large. "It's either go big or don't worry about it," he said. "If you went too small you may end up lending to some no-name little data centre company and that's much riskier."

According to the report, managers such as Alceon and MA Financial are looking toward GPU financing and powered land as possible ways into the AI sector. The absence of local AI lending to date suggests the sector's entry strategy is still being developed, with scale and counterparty risk remaining the central considerations.