Institutional funding deal signals growing appetite for New Zealand private credit
Institutional capital is making a decisive move into New Zealand's non-bank mortgage market, with ASX-listed Challenger committing $150 million to Auckland-based private credit lender Finbase in a forward flow arrangement focused on first-ranking, low loan-to-value residential mortgages.
The deal marks Finbase's first large-scale institutional funding line and is expected to push total funds under management toward $500 million upon deployment.
"This is a significant milestone in the evolution of our platform," said Finbase managing director Pernell Callaghan (pictured). "An ASX-listed investment manager committing capital at this scale is a strong endorsement of the infrastructure we've built."
Why institutional capital is moving into NZ non-banks
Tighter bank credit settings and regulatory capital requirements have steadily pushed investor and commercial borrowers toward non-bank alternatives, where speed and execution certainty carry a premium.
Finance company mortgage lending has risen more than 30% since the Depositor Compensation Scheme took effect in July 2025 — a growth trajectory that is drawing offshore institutional capital into the sector.
Challenger's head of whole loans, Andy Armstrong, said the deal reflects confidence in Finbase's track record and risk focus.
"We are pleased to partner with Finbase as they continue expanding their presence in the New Zealand market. Their positive track record and focus on risk give us confidence in supporting their next phase of growth," Armstrong said.
Bigger product range, more options for clients
Armstrong confirmed the new capital will allow Finbase — ranked fourth among non-bank lenders in a recent broker satisfaction survey — to "increase origination in their core segments and broaden their product offering into adjacent lending opportunities."
Callaghan framed the deal as the first move in a longer-term build.
"Our objective is to build a durable institutional private credit platform in New Zealand. This partnership is the first major step in that direction," he said.
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