We’re pleased to share that research firm Lonsec has upgraded its rating of the Epsilon Direct Lending Fund – Class B (APIR PTC2791AU) to Recommended, from Investment Grade. The upgrade follows the Fund’s fifth anniversary in May 2026.
Key quotes from the review (Lonsec, Epsilon Direct Lending Fund – Class B, 21 October 2026):
“The fund has established a five-year track record, underpinned by consistent performance and positive investor outcomes. Epsilon offers a robust investment process, providing investors with a ‘pure-play’ corporate lending strategy, free from real estate exposure.”
“The Fund has delivered stronger risk-adjusted performance outcomes relative to its peer group.”
“Co-founders Mick Wright-Smith, Joe Millward and Paul Nagy bring deep experience in Australia’s corporate middle market, with strong alignment of interests between the investment team and investors in the Fund.”
“Pleasingly, over its last three-year period the Fund has achieved the target investment objective of BBSW +6% p.a., generating a return of 10.02% p.a. over this time (as of end June 2026). The Fund has delivered stronger risk-adjusted performance outcomes relative to its peer group.”
“The Manager’s senior leadership team is highly regarded. Senior members are finance professionals with over two decades of experience in corporate lending (deal origination, finance, execution and management) across a number of business and credit cycles.”
“Epsilon considers themselves to be active in nature, proactively taking steps to protect investor capital in instances of deteriorating loan performance, which is viewed positively.”
“The clarity of the Fund’s investment philosophy to a targeted segment of the Australian private credit market is considered to be a benefit of the Fund.”
“A positive development has been the formation of a standalone valuations committee, comprising an external chair and two Epsilon representatives, strengthening valuation governance and oversight.”
“Pleasingly, Epsilon produces quarterly reporting which depicts a detailed breakdown of portfolio composition and underlying loan performance to investors.”
“Given the strategy size and healthy inflows, there are no capacity concerns, and the Fund has ample room to grow.”
Since April 2026, the Fund has offered monthly distributions and monthly liquidity, with 30 days’ notice and no lock-up.
For a complete understanding of the analysis, findings, and associated risks, investors and advisers should refer to the full report.
Wholesale investors and advisers can request a copy of the report by emailing Duncan.hodnett@epsilondl.com.au