Private credit's Bathla chickens come home to roost
Everyone could see this coming except the retirees who funded it.
The collapse of major Sydney home builder Bathla Group will, when the full scale of the disaster is revealed, leave tens of thousands of victims. Young couples who have paid deposits on unfinished apartments, and thousands of retirees invested in high-yield private credit funds whose loans are now in arrears, will wear the financial impact.
Before I explain why Bathla Group’s collapse was both inevitable and predictable perhaps as far back as five years ago, we should spare a thought for one cohort of Bathla victims who gained their exposure just 34 days before administrators walked in the door.
Bathla’s grand financial house of cards was propped up with at least $3.3 billion of high-risk money, virtually all of it from private credit funds that sucked in billions from the elderly and otherwise unsophisticated.
One of those lenders was La Trobe Financial, controlled by swashbucking Canadian private equity group Brookfield, headed in Australia by managing partner Len Chersky.
