Private Credit:
BEYOND THE BANKS!
PODCAST  

Jeremy (Host):
You're watching The Strategy Sessions. I'm Jeremy Birt, CEO and Founder of The Strategy Factory, where we help executives and businesses accelerate transformation and progress.

Today, we're talking private credit with someone who knows the space inside and out—Patrick William, Co-Founder and Managing Director of Rixon Capital.

Patrick, welcome to the show.

Patrick (Guest):
Thanks Jeremy, great to be here.

Jeremy:
Let me give everyone a proper intro—Patrick William is the Co-Founder of Rixon Capital, a boutique private credit fund manager based in Sydney. He’s a recognised leader in structuring non-dilutive, asset-backed finance solutions for SMEs. Over the past two decades—across roles at Macquarie Capital, Aqua Asia, and Rixon Capital—he has overseen the development of over $160 million in high-yield SME credit.

He holds dual degrees in Commerce and Economics from the University of Queensland and was awarded the International Economics Scholarship for Academic Excellence.

How was that?

Patrick:
My mum would be proud!

Jeremy:
She should be! So let’s get into it—what exactly is private credit?

Patrick:
It’s really just a fancy term for non-bank lending. The key difference is that banks can lend out many multiples of their deposits because they’re authorised deposit-taking institutions. Private credit funds don’t have that leverage. For every $1 you give us, we lend $1. It’s a one-to-one proposition. That’s it.

Jeremy:
Simple. So you founded Rixon Capital in 2022. What drove you to make that leap from corporate life to building your own fund?

Patrick:
In my previous role, I was investing money on behalf of ultra-high-net-worths in North America—typically $3M to $5M at a time. We were delivering 10–12% returns with monthly income, and I thought: surely there’s an opportunity to bring that to Australian wholesale investors at a much lower entry point.

Imagine you're retired with a $500K SMSF—earning 4% doesn’t get you far. But 10–12%? That’s a game changer.

Jeremy:
And your minimum investment is $50,000, right?

Patrick:
Correct. That’s the floor. But our median is around $500K. Some investors start with $50K to test us out, and when they see $500/month coming in, they often scale up. Our largest single investment is $11 million.

Jeremy:
Interesting. Let’s talk about risk. Private credit often comes with high returns—does that mean higher risk?

Patrick:
That’s a common assumption. But our returns come from a scarcity premium, not a risk premium. We lend in a space the big players ignore—loans under $20M. The effort it takes to underwrite a $5M deal is the same as a $500M deal, so big funds don’t bother. That’s our niche.

Jeremy:
So you’ve found an underserved segment?

Patrick:
Exactly. It’s a small pond, but we have it to ourselves.

Jeremy:
Tell me about the early days of Rixon. What was it like taking the plunge?

Patrick:
Terrifying. I remember sending the resignation email and thinking—well, you’ve done it now. The models said we’d be overwhelmed with demand… but reality was slower. Still, with monthly income funds, once the first investors get paid, trust starts building. That’s how we grew.

Jeremy:
What surprised you most between 2022 and now?

Patrick:
How hard it is to raise money—even with a good product. It’s not about logic. It’s about trust. We’ve had investors take two years to commit, after a dozen polite follow-ups. You’ve got to respect that. It’s their money.

Jeremy:
What truly sets Rixon apart?

Patrick:
Our discipline. Every loan must meet a strict profile:

• First-ranking

• Fully secured

• Asset-backed

• Cash interest paid monthly

It’s in our mandate. That consistency builds long-term trust with investors.

Jeremy:
And you’re targeting 10–12% annual returns?

Patrick:
Yes. To net that for investors, we need to lend at 12–14%, factoring in fees. It’s a math-driven model. The challenge is when more money comes in than we can deploy—we’ve turned investors away to protect returns.

Jeremy:
That's rare in funds!

Patrick:
It is—but it builds credibility. People are surprised when we say, “Not this month. Let’s talk next month.” That creates demand.

Jeremy:
Zooming out—what’s happening in the broader private credit market?

Patrick:
It’s booming. In the U.S., private credit accounts for 90% of mid-market corporate lending. In Australia, it’s about 10%. That’s a 9x gap in market maturity. We’re still in the early innings.

Jeremy:
And how does inflation affect your returns?

Patrick:
We use floating rate loans, so returns move with the cash rate. Our real margin—usually 10%—stays the same. If inflation pushes rates up, returns go up.

Jeremy:
How diversified is the portfolio?

Patrick:
Very. We now manage nearly 20 active facilities, and add a new loan almost every month. Investors get full transparency—we publish every loan in our monthly report, with asset type, LVR, size, and structure.

Jeremy:
What’s the “next big thing” in this space?

Patrick:
Honestly, there’s no next big thing. The current market is full of opportunity. We lend only in AUD, to Australian SMEs. No FX risk. No global exposure. Very focused.

Jeremy:
Let’s get practical—what red flags should investors watch out for?

Patrick:

1. No AFSL licence? Walk away.

2. No independent trustee? Big risk.

3. Don’t invest in what you don’t understand. Ask questions. Get advice.

Jeremy:
Are you working with financial advisers?

Patrick:
Yes. It’s competitive, but we’ve built relationships with several large wealth managers. We also host investor sessions—present, answer tough questions, and let people kick the tyres.

Jeremy:
Speaking of tough questions—what do people ask?

Patrick:
“Do you have skin in the game?” Absolutely. Rixon is my largest personal investment after my home. It even bridged my salary in the early years.

Also, “Who approves the loans?” We have a three-gate system: internal review, independent investment committee, and trustee sign-off. I can’t unilaterally approve anything.

Jeremy:
And on the tech side—how are you using AI?

Patrick:
So far, just HR letters. But we’re exploring using AI to process borrower data—thousands of rows each month—to spot trends, inconsistencies, and risks earlier than humans might.

But AI can’t replace gut feel. Fraud is personal. If something feels off about a borrower, we don’t proceed. AI can’t yet detect dodgy vibes.

Jeremy:
Great answer. If people want to invest or learn more—how do they get in touch?

Patrick:
Easy. Visit rixon.capital or email me at patrick.william@rixon.capital. I speak with every potential investor personally.

Jeremy:
Patrick, thanks for sharing the Rixon Capital journey. This has been a fascinating conversation—and a valuable one for investors and advisers alike.

And to everyone watching: if you found this insightful, please like, share, and pass it on to someone who needs to know more about smart investing.

correct toward your own true north—this episode is your sign.