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A new player has emerged in Australia’s growing private credit market, with the launch of Colter Bay Capital, an institutional corporate private credit fund led by former Commonwealth Bank (CBA) executive Mark Wang.
Officially launched on Tuesday (10 March), the fund has positioned itself as a solution for Australia’s lower mid-market, a segment it said represents an estimated $25 billion funding gap across roughly 26,000 businesses.
The fund said it intends to back family-owned, profitable, cash-generative, and asset-light businesses, often overlooked by traditional lenders that require owners to put personal assets, including their family home, on the line to access growth capital.
It launched with $100 million in institutional liquidity, supported by a leading domestic fixed-income manager and a Gstaad-based Swiss family office.
While it does not yet have an aggregator arrangement in place, the fund said it is eager to build its broker network and work with mortgage and finance brokers to source and execute lower mid-market corporate transactions.
Wang, who brings 25 years of experience in private capital markets at CBA and Merrill Lynch to his new role as the fund’s managing director, described the funding gap in Australia’s lower mid-market as a structural deficit that has persisted for decades.
“Australia’s best businesses are being held back by the constraints of a capital-based lending system. Colter Bay Capital exists to fill that gap with patient, intelligent capital that recognises the true value of a great business,” he said.
“We are here because the market needs us to be here, and because the opportunity is genuinely compelling for investors who understand it.”
The fund’s advisory board features several high-profile appointments, including former NSW premier, the Honourable Nick Greiner AC, and Kirk West, former executive managing director at global asset manager Principal Asset Management.
Both join as strategic advisers, with Australian-born, New York-based investor and financier Sean Garman serving as chairman.
Garman said he believes Australia has all the ingredients for a deep and sophisticated private credit market.
“Strong rule of law, transparent business practices, a mature superannuation system hungry for yield, and tens of thousands of excellent businesses that banks simply will not back on reasonable terms,” he said.
“Colter Bay Capital is here to build that market, transaction by transaction, and to demonstrate that private credit done well is good for businesses, good for investors, and good for the economy.”
[Related: Assetline Capital appoints national leadership team for private lending]