A decade is a long time in financial markets. When GCI was founded in 2015, private credit in Australia was still a relatively niche part of the market, an alternative source of capital for businesses that couldn’t access traditional bank finance. Fast forward ten years, and private credit has become an established pillar of the financial ecosystem, providing borrowers with flexible, fast, and reliable capital solutions. As we mark our 10-year anniversary, we wanted to reflect on the evolution of private credit, the lessons we have learned, and where we see the market heading next.
2015: A Market Opening Up
When we started GCI, we saw a gap in the market. Following the Global Financial Crisis, Australian banks implemented stricter lending standards, creating space for non-bank capital providers to compete while simultaneously making it challenging for smaller non-bank lenders and SMEs to secure traditional commercial loans. At the same time, businesses still needed capital to grow, restructure, or manage short-term challenges. This disconnect created an opportunity for private lenders to step in and provide tailored financial solutions.
In those early years, private credit was still an emerging concept in Australia. Borrowers often saw it as a path to follow once they were rejected by a large bank rather than a strategic funding option that could provide speed and flexibility. Many investors were still getting comfortable with the asset class given the traditional focus on real estate and bank shares.
We focused on demonstrating the value of private credit to borrowers – certainty of execution, speed to close and bespoke structuring to provide flexibility. On the investor side we focused on transactions that provided a strong return with robust downside protection and crystal clear transparency. We built our business around these core principles.
The Rise of Private Credit in Australia
In Australia, the private credit market has experienced remarkable growth and has benefitted from the structural changes that have unfolded in the US and Europe. The sector’s assets under management have quadrupled over the past decade, reaching $205bn in 2024[1]. Three key trends have driven this shift:
- Bank Retreat – Over the past decade banks have retreated from certain lending sectors, particularly SME and parts of real estate finance, due to evolving regulatory requirements and shifting risk appetites. This has created a funding gap, which private lenders have moved to fill by offering tailored, flexible capital solutions.
- Institutional and High Net Worth Investment – The growing appetite from institutional investors, family offices and high net worth investors has provided the capital base for private credit to expand significantly.
- Sophisticated Borrowers – Businesses have become more knowledgeable about their funding options and are now proactively seeking out private credit solutions rather than seeing them as a fallback. They are frequently advised by experienced and knowledgeable corporate advisors and brokers.
Throughout this period, GCI has evolved alongside the market. We have grown our capital base, expanded our investment strategies, increased the size and depth of our team and built long-term relationships with advisors and borrowers who now see private credit as a valuable and often superior alternative to traditional finance.
Despite private credit’s rise, the mid-market (transactions in the $5-50 million range) remains underserved. Borrowers in this space are too large for traditional non-bank lenders yet too small for institutional capital. This is where we have seen the greatest opportunity to provide structured capital solutions to businesses that need certainty, speed, and flexibility.
Lessons from a Decade in Private Credit
Looking back on ten years of lending, a few key lessons stand out:
- Certainty and speed matter more than ever. In an increasingly complex financial landscape, borrowers value knowing that their funding is locked in and will be delivered on time. The ability to move quickly and decisively has been a major differentiator.
- Advisors are playing an important role. Every deal is different, and advisors have become indispensable in helping businesses access debt. Unlike traditional bank lending, private credit requires a deep understanding of each borrower’s unique circumstances. The best solutions often involve structuring capital in creative ways that unlock opportunities for businesses.
- Trust and transparency is the foundation. Whether it’s borrowers, advisors, or investors, private credit is built on relationships. Our ability to work creatively, embracing complexity, delivering on our commitments and being direct and transparent with borrowers and investors has been the foundation of our success.
Private Credit Today: A Maturing and Essential Market
By 2025, private credit has evolved from an emerging asset class into a mature, essential component of the financial landscape. Borrowers now frequently recognise it as a first-choice option, particularly in situations where flexibility, speed, and bespoke structuring are required. At the same time, investors appreciate the attractive risk-adjusted returns that private credit can offer in a world of fluctuating interest rates and economic uncertainty.
For GCI, this means operating in an environment that is more competitive yet still unevenly served, particularly in the mid-market where businesses often struggle to find the right funding partners. Today, the focus has shifted from explaining private credit to proving how we deliver better, faster, and more commercially minded solutions than other lenders.
Looking Ahead: The Future of Private Credit and GCI’s Next Chapter
As we look to the next decade, several trends will shape the evolution of private credit:
- Regulatory and macroeconomic shifts – Interest rates, inflation, and regulatory changes will continue to influence private credit. Ongoing engagement with regulators and adherence to best practices will be essential for maintaining the sector’s stability and growth. We have recently seen ASIC publish their discussion paper into the dynamics of private markets vs public markets, and there is likely to be some additional disclosures required of the private credit sector. We embrace this change.
- Technological Advancements – As the private credit market grows, technology will play an increasingly important role. Enhanced data analytics and digital processes will improve risk assessment and streamline funding decisions, making private credit even more efficient. At the same time, the rise of AI-driven underwriting models could significantly reduce friction in deal execution, allowing lenders to assess and invest capital faster while improving transparency for investors. Those who embrace these advancements will gain a competitive edge in delivering speed and certainty to borrowers.
- More Institutional Capital Flowing In – Superannuation funds and global investors are increasingly recognising private credit as a core part of their portfolios, leading to larger pools of available capital. This influx of institutional capital is likely to drive further competition, compressing yields but also creating opportunities for scale. Investors will increasingly seek managers with a proven track record, strong risk management, and the ability to invest capital effectively in more complex or underserved market segments. The challenge will be maintaining discipline in underwriting while continuing to provide attractive returns.
- Rising Borrower Sophistication – Borrowers are becoming more sophisticated in their capital planning and are actively seeking flexible solutions that complement traditional bank finance. This shift means that lenders must not only provide capital but also act as strategic partners, offering tailored structures that support business growth, acquisitions, and transition planning. The role of private credit is evolving beyond transactional lending towards a more relationship-driven model.
For GCI, the focus remains on staying ahead of these trends while continuing to deliver on the core principles that have defined our success—deep understanding of borrower’s needs, certainty of execution, and a commitment to providing commercial solutions that create real value for our borrowers and investors.
Closing Thoughts
Reflecting on the past decade, it’s clear that private credit has undergone a significant transformation, and we are proud to have been part of this evolution. GCI’s journey has been one of growth, learning, and adaptation, and we are grateful for the trust our borrowers, investors, and partners have placed in us along the way.
As we step into our next decade, our mission remains the same: to provide businesses with the capital they need to unlock opportunities, navigate complexity, and thrive in an ever-changing market. Here’s to the next ten years.
If you would like to discuss with the GCI team our approach to partnering with businesses as a strategic capital partner, please get in touch.
To read more about how we have helped a variety of businesses implement transformation over the years, visit www.gcifunds.com/case-studies/
[1] Alvarez & Marsel Australian Private Debt Market Review 2024.