Perpetual targets 10-15% returns via alternative credit assets
Perpetual is shifting its investment focus to alternative credit to capture higher yields while avoiding the terms dictated by private equity firms. The strategy targets 10-15% returns on assets such as music rights, aircraft, and shipping.
Christian Wienkamp, Chief Investment Officer at Perpetual, the family office of the Wilsdorf family, manages assets in the single-digit billion euro range across five funds. The portfolio follows a 60-40 risk structure but utilizes private markets heavily, specifically through alternative credit rather than direct lending. Wienkamp argues that direct lending is unattractive because private equity firms dictate terms, forcing investors to become price-takers. Instead, Perpetual invests in assets like music rights, legal asset financing, aircraft, and shipping, targeting 10-15% returns per asset. For music rights, the firm buys catalogs from artists like Daddy Yankee, treating them as stable cash flow streams similar to bonds, with a target portfolio return of 8-10%. Aircraft financing focuses on narrowbody planes like the A320 and Boeing 737 due to their liquidity; Wienkamp noted that A320 values dropped only 5% during the pandemic. Shipping was the best-performing asset class for the year due to high oil rates. The firm uses an evergreen structure to manage capital efficiency and avoid the opportunity costs of committed capital in traditional private equity funds. They also hold multi-strategy hedge funds like Point72 for market-neutral returns, aiming for cash plus 4-5%.