Private Credit and Faith-Inspired Financial Stewardship

By: Joni Boyd

With interest rates causing all sorts of cost-of-living issues, many Aussies are looking for different ways to invest.

Founder and Chairman of Montgomery Investments, Roger Montgomery chatted to us about investment and financial success, and how faith-inspired stewardship may look.

While traditional investments like stocks, bonds and real estates are taking a back seat, to what some may say are adrenaline-infused alternative investments, Roger says some of those alternatives are worth looking at.

Defined as “an investment that isn’t considered core for your portfolio or a mainstream investment”, these may include everything beyond the conventional, including private credit.

“Private credit has been around for centuries,” Roger said. “Lending money to other people or to businesses has been around a long time.”

Private Credit Could Become Mainstream

Historically dominated by bank institutions, private lending has seen significant changes post-global financial crisis. There is now a $400 billion gap that non-bank lenders are increasingly filling.

Because of this evolution, Roger believes private credit could soon transition from an alternative side-show to a main event in the investment arena.

“I do think it’s going to become more mainstream,” he said, citing the increasing demand for stable income sources among retiring baby boomers who are risk-averse to stock market volatility.

The potential of private credit funds offering 7 per cent to 10 per cent annual return to investors, some as accessible as with $10,000 investments, signifies a shift in opportunities for investors formerly barred by high-wealth entry requirements.

Roger does offer warning however: “It’s really important that you find funds that have a long track record of success.”

Start With Your Faith

Nevertheless, faith must underpin financial-stewardship, Roger believes.

“As a Christian man, I have a responsibility to be a good steward with the money that I’ve got and to make wise decisions,” he said and explains that he has chosen not to invest in ventures that might have harmful environmental impacts.

“Everybody’s line in the sand is different,” Roger said.

Varied personal convictions might lead to different investment pathways, whether or not faith-based filters are applied, something which Roger says is important to pay attention to.

This approach makes sure there’s alignment between personal values and financial goals, creating a lens through which investments can be considered, he explained.

“Our conscience is God’s voice and that will ultimately determine the choices that you make,” he said. “That line in the sand is a very personal, subjective one, and so those decisions ultimately are a personal decision.”