Good evening,

Sydney’s Rixon Capital has started raising for a new private credit fund that will target higher returns within its niche of sub-$20 million loans to small-to-medium enterprises.

The firm has over the past week started presentations to private wealth businesses for the Rixon Credit Opportunities Fund, which is shooting for annual net returns of 10 per cent over the cash rate and is allowed to invest in first- and second-ranking debt for small-to-medium enterprises.

The fund has quarterly redemptions with a 90-day notice, and Rixon is said to be confident it can hit the $500 million mark in the next three to five years.

It comes after Rixon earlier this year hired Daniel Neilson from Marshall Investments, the family office of Saba owner John Marshall, as its head of private credit. Part of Neilson’s remit was to assist with originating deals for the new fund alongside co-founder Patrick Prasad William.

The new fund is higher up the risk curve than the existing $100 million Rixon Income Fund, which stuck to first-ranking debt and aimed for 11.9 per cent net returns. This fund lent to companies like start-up research and development financier Kashcade and M&A financing for former Illion CEO Simon Bligh to buy Worthington Clark, a business that matches lost bank accounts, shares and other assets with their rightful owners.

Rixon’s illustrative pricing was for 17 per cent a year, including 14 per cent paid in cash each quarter and 3 per cent capitalised interest.

Read the full story tomorrow and more on the Street Talk page.

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