Perpetual Credit Income Trust Posts 7.3% Portfolio Return, Raises $93M Capital
Perpetual Credit Income Trust reported a 20.7% increase in net assets to $532.8 million for FY25, while posting a modest profit decline amid challenging market conditions. The Trust’s $93 million capital raise and diversified credit portfolio underpin its strategy for stable income and growth.
- Net assets rose 20.7% to $532.8 million
- Profit declined 11.3% to $37.55 million
- Investment portfolio returned 7.3% for FY25
- Raised $93 million via placement and unit purchase plan
- Robust governance and risk management frameworks
Strong Asset Growth Amid Profit Pressure
Perpetual Credit Income Trust (ASX, PCI) has released its annual report for the year ended 30 June 2025, revealing a significant 20.7% increase in net assets attributable to unitholders, reaching $532.8 million. This growth was driven by a successful capital raising effort and ongoing investment activity, despite a decrease in profit to $37.55 million, down 11.3% from the previous year.
The Trust’s investment portfolio delivered a 7.3% return for the financial year, slightly below its target benchmark of the Reserve Bank of Australia (RBA) cash rate plus 3.25%, but maintaining strong performance over longer horizons. The modest profit decline reflects a softer net positive portfolio performance compared to FY24, where returns reached 10.2%.
Capital Raising and Portfolio Positioning
In July and August 2024, the Trust raised approximately $93 million through a placement to wholesale investors and a unit purchase plan for eligible unitholders. This capital injection expanded the Trust’s size and enhanced liquidity, a development welcomed by management and investors alike.
The Trust’s portfolio remains actively managed with a diversified allocation across credit and fixed income assets, including a 5.4% exposure to corporate hybrids and significant holdings in private credit via the Perpetual Loan Fund. The Investment Manager, Perpetual Investment Management Limited, continues to emphasize a risk-aware approach, focusing on quality Australian corporates and avoiding higher-risk sectors such as SME lending and healthcare.
Market Environment and Risk Management
The year saw elevated volatility in bond yields and credit spreads, influenced by global economic uncertainties and US trade policies. The Trust’s floating rate structure helped mitigate interest rate risks, while active relative value trading during market dislocations contributed positively to performance.
Regulatory developments, including APRA’s proposal to phase out additional Tier 1 capital bonds, have prompted adjustments in portfolio positioning, particularly in hybrid securities. The Trust’s governance and risk frameworks remain robust, with comprehensive oversight of service providers, compliance, and ESG integration into investment decisions.
Distribution and Outlook
Distributions for FY25 were 8.2725 cents per unit, totaling $40.1 million, slightly lower than the prior year’s 8.8705 cents. A subsequent distribution of 0.6800 cents per unit was declared and paid in August 2025.
Looking ahead, the Trust acknowledges ongoing uncertainties in global fiscal policies and domestic monetary easing but remains well-positioned with a diversified portfolio and a short weighted average life of 3.1 years. The management team, including the newly appointed Deputy Portfolio Manager Greg Stock, aims to continue delivering stable income and capitalizing on relative value opportunities.
Bottom Line?
Perpetual Credit Income Trust’s strong asset growth and strategic capital raise set the stage for navigating market volatility and regulatory shifts in FY26.
Questions in the middle?
- How will regulatory changes to hybrid capital impact the Trust’s portfolio composition?
- What are the implications of the leadership transition on investment strategy and performance?
- Can the Trust sustain distribution levels amid ongoing market uncertainties and profit pressure?
