From cold call to capital giant: The Metrics story in Lockhart’s words

In this episode of The Rules of Investing, Lockhart discusses the conditions that led to the birth of Metrics, its phenomenal growth, and the ongoing challenges that it and the private credit sector face.

He also unpacks the current market conditions and what lower interest rates will mean for Metrics’ opportunity set and potential returns for investors. Finally, he shares an exciting new growth opportunity that leverages the company’s existing relationships and skillset.

This episode offers a rare look inside one of Australia’s most successful private credit managers.

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Listen to the entire podcast above, or read a short summary below. 

Metrics’ founding principles: born of crisis, built for discipline

When Andrew Lockhart co-founded Metrics Credit Partners in 2013, it was amid the rubble of the GFC. “The banks were looking at their distribution paths freezing up,” Lockhart recalled, adding, “We thought there had to be a better way to provide access to fixed income for investors.”

At the time, Lockhart and his partners saw a critical shift: banks were being forced to retreat due to regulatory capital requirements. “The regulators wanted banks to be unquestionably strong,” he explained. “That meant holding more capital, which made certain types of lending less attractive for them.

"We saw the opportunity to step in and originate and manage those loans directly," noted Lockhart.

What followed was a painstaking 12-month effort to raise initial capital. “It took one investor, from a cold call, who committed $75 million. That was the start.”

Raising capital is hard. Deploying it is easier

Despite Metrics now overseeing more than $30 billion in assets, Lockhart remains clear-eyed about the most challenging aspect of the business.

“Raising capital is always the hardest part,” he said plainly.

“There's strong demand for credit. We’re seeing $2 billion of loan maturities a quarter and maintain a work-in-progress pipeline of $15 billion.”

A recent example? Metrics raised $315 million in a single day for its flagship fund, the Metrics Master Income Trust (ASX: MXT). “That was the cap, actually,” said Lockhart. “But it reflects the confidence investors have in our consistent delivery.”

Lockhart also emphasised how tightly Metrics links deployment with investor interests.

“We want borrowers to pay a fair price, but equally, we must drive the right return outcome for our investors.”

Risk, transparency, and the importance of being proactive

Throughout the episode, Lockhart reinforced that risk management is Metrics' cornerstone.

“You don't get paid to take no risk, but you must take sensible risk and manage it appropriately,” he said.

“Everything we do is designed to preserve capital and generate return.”

Metrics offers daily NAVs, monthly distributions, S&P-rated funds, and quarterly transparency reports. “Transparency isn't just compliance, it’s core to what we do,” said Lockhart.

“If you see our daily unit price, you should be confident it reflects the true risk settings.”

On the ASIC discussion paper and broader regulatory concerns, Lockhart was supportive: “We welcome strong, fit-for-purpose regulation. We're managing other people’s money, and it’s essential they have trust in how we operate.”

Seizing the opportunity: Navalo, consumer credit, and real estate

While risk control remains central, Lockhart is equally focused on future growth. One major push is Navalo Financial Services, a new consumer and SME lending arm.

“It’s about leveraging our skillset to originate highly diversified pools of small-ticket loans—home, car, SME,” he explained.

Real estate also continues to be a major theme. “Our real estate team just secured development approval for the Sir Stamford site,” Lockhart shared. “It’s one of the last opportunities to build high-density residential overlooking Sydney Harbour.”

Amid a housing shortage and sluggish productivity, Lockhart sees residential development as a necessary engine for both returns and social contribution.

“We’re helping deliver the housing that’s so badly needed. And our investors are being well compensated for that.”

The case for private credit: now more than ever

Lockhart views the current macro landscape - post-COVID recovery, moderating inflation, and potential further rate cuts - as a sweet spot for private credit.

“We’ve had a pandemic shock, a construction cost blowout, and aggressive rate hikes. We've come through all three. Now we’re seeing companies outperforming, not deteriorating.”

He believes falling rates will lower credit risk while unlocking more deployment opportunities. “As rates come off, borrowing becomes more affordable. Economic activity picks up. Demand for credit rises. And investors still receive healthy returns.”

Asked what investors might be missing, Lockhart responded: “People often focus on macro backward-looking risks. But we’re bottom-up. We’re focused on the cashflows, the project delivery, the borrower’s fundamentals.”

He closed with a vision for the next five years: “I want us to be a business that consistently delivers for investors while responsibly supporting economic activity, whether that’s a corporate expansion or housing for growing communities".

If we can keep doing that, we’ll have succeeded.

Learn more

Metrics Credit Partners are a leading Australian non-bank corporate lender and alternative asset manager with ~$23bn in AUM, specialising in fixed income, private credit, equity and capital markets. To learn more, please visit their website.