The Merricks Capital Partners Fund (the Fund) returned 0.8%* in April, maintaining a 9.9%* return on an annualised basis since inception.
April’s market volatility was driven by geopolitical instability and abrupt shifts in US trade policy. These developments undermined confidence in the credibility of US institutions and monetary leadership, prompting increased risk premia across global markets. Gold prices surged to record highs, underpinned by sustained central bank accumulation as monetary authorities continued diversifying away from US dollar exposure (World Gold Council). Credit spreads widened in line with equity volatility, with the Fund’s CDS hedge contributing positively to monthly performance (+10bps).
In this environment, we’re seeing institutional capital rotate toward real assets offering income, security, and sovereign stability. Australia and New Zealand are emerging as preferred jurisdictions for capital deployment, offering legal clarity, scalable production models, and credit dynamics reminiscent of the US a decade ago. Private credit strategies delivering +8% returns (net of fees and costs), secured against
tangible assets and with defined exit pathways, are increasingly viewed as core allocations.
Whilst no new loans settled during the month, capital recycling activity continued. The Fund received proceeds from the Melbourne Place Hotel repayment (4.1% of NAV) following its successful financial close. This facility delivered a net IRR of approximately 3%, with potential to lift to 4% depending on the timing and extent of further recoveries via receivership. The outcome highlights the value of active management and the downside protection afforded by real asset security—particularly for a project that took 12 months longer than anticipated for the builder to deliver.
Looking ahead, the Fund is actively assessing more than $1.3bn in new investment opportunities across residential, horticulture, and specialised infrastructure. Due diligence is well advanced on a $102m facility secured by Queensland horticultural assets, expected to settle in the next few weeks. Structured at a 55% LVR and forecast 11% net IRR (after fees and costs), the loan represents a compelling opportunity aligned with the broader macro trend towards defensive real estate assets.
*These returns are stated net of fees and costs
