Qualitas Gets Caught In A Private Credit Sell-Off It Didn't Cause

Fund managers say strong fund growth and a differentiated lending model are being overshadowed by global private credit contagion

30 Jun 2026 · 5 min read

DS Capital's June 2026 annual report captured a disconnect that has defined Qualitas' past year: an impressive operating performance alongside a falling share price. The manager said the alternative asset manager emerged as a clear beneficiary of the structural shift toward commercial real estate private credit, reinforcing its position as a preferred destination for institutional capital, even as its share price fell 17 per cent over the year on shifting sentiment toward private credit generally. Half-year results showed almost 40 per cent growth in fee-earning funds under management and around 60 per cent growth in deployed capital, allowing management to guide to full-year profit growth of 13 per cent to 25 per cent.

We view Qualitas as a sector leader well positioned to navigate the complex property market, and able to grow earnings by at least 15% per annum over the next few years.

— DS Capital, Annual Report, June 2026

Caught in a global private credit scare

The share price weakness traces to a broader crisis of confidence in private credit that peaked in early 2026. Perpetual Asset Management reported the stock fell 33.5 per cent over the March quarter, a significant detractor, as several large global credit providers including Blue Owl imposed redemption limits that unsettled investors and attracted regulatory scrutiny, compounded by fears around AI disruption weighing on lower-quality software-related loans. Further weakness followed the escalation of the US-Iran conflict in March, which lifted inflation expectations and interest rate concerns, dragging the broader real estate sector down 11.3 per cent for the month. The manager used the weakness to add to its position, arguing Qualitas had been unfairly caught up in negative sentiment given its lending is concentrated in Australian residential property with no financial leverage in its credit funds, unlike many global private credit peers.

QAL is differentiated by its aligned and experienced management team, rigorous credit underwriting, stable institutional capital base and dedicated focus on real estate lending. In a more challenging credit environment, the company is well positioned to gain market share.

— Perpetual Asset Management, Monthly Report, March 2026

A strong result that couldn't shake the contagion

Prime Value Asset Management made a similar point about the disconnect in March 2026, noting Qualitas posted an exceedingly strong first-half FY26 profit result but appeared caught up in the broader sell-off of the global private credit sector regardless, reiterating that the company's exposure is starkly different to global peers given its concentration in Australian residential lending without financial leverage.

A new UK growth platform

DS Capital's June 2026 update also flagged a late-2025 UK acquisition bringing an established book of clients and funding sources, a deal the manager described as immaterial in price and near-term earnings terms but providing a new strategic growth platform for the business as it looks beyond its core Australian market.

Not everyone stayed for the ride

Quest Asset Partners had already exited its position back in September 2025, selling into share price strength on anticipation of index inclusion that ultimately did not eventuate, having reached its own assessed target price before the subsequent private credit sell-off unfolded.

What managers are watching next

With fee-earning FUM growing close to 40 per cent and deployed capital up around 60 per cent in the latest half, the key questions for managers are whether Qualitas can continue converting that growth into the 13 to 25 per cent profit growth range management has guided to, and whether broader sentiment toward private credit recovers enough for the market to properly separate Qualitas' differentiated, unleveraged Australian residential lending model from the global peers whose redemption issues triggered the initial sell-off.