'We like optionality': Terrace Tower Group is taking back control by going direct on private credit
The family office is overweight private credit but prefers to originate its own loans or-co lend rather than invest in funds.
Prominent Sydney family office Terrace Tower Group has allocated nearly half of its non-property portfolio to private credit, but is focusing on originating its own loans or co-lending rather than awarding money to fund managers in the asset class.
Terrace Tower is the family office of the late John Saunders, who co-founded Westfield with Frank Lowy. The investment team is spread across Sydney and New York.
Speaking to Capital Brief, Terrace Tower head of investments Adam Shell said the family office began investing in private credit in 2018, out of necessity, after selling half of Westfield Eastgardens in Sydney's east to Scentre Group. Around the same time, the family internalised its investment team, which was then tasked with replacing the income lost from the sale.
At the time, interest rates were low, and the team saw private credit as a way to protect the downside while generating attractive nominal cash returns.
