Revolution Private credit Income Trust (REV)

Hi John,

The Revolution Private Credit Income Trust is due to list on the ASX on 22nd of September. The Trust offers investors exposure to a professionally managed portfolio of private credit assets – Much like MA Financials’ MA1 security.  The key risks for the Revolution Private Credit Income Trust are borrower defaults impacting returns, limited liquidity in private loans and the ASX listing trading below asset value, plus broader market volatility that could pressure both income and unit prices.

While their Private Credit Income Trust obviously has no track record its underlying strategy—via the Revolution Private Debt Fund II (Fund II)—does have a track record, delivering solid returns since inception in late 2019:

• 1-Year return after fees around 8.75%.
• 3-Year return after fees around 8.50%.
• 5-Year return after fees around 7.32%.

In terms of fees, the Trust charges a flat 0.95% per annum of the net asset value (NAV) ­– this covers management fees and costs and there is no Performance Fee. Interestingly, origination & transaction fees earnt are passed directly to investors — meaning they are not retained by the manager, which we like and removes a conflict in the origination process – most other managers keep these fees.

Given this is a new issue, there are strict rules around distribution, and it’s important to understand the target market determination and disclosure documents when considering an investment.