Retail legend invests $100m in Ray White private credit push
Ray Itaoui, one of the country’s most successful retail entrepreneurs and retail property investors has made a big push into the booming private credit sector after committing $100 million to Ray White Capital’s latest real estate debt fund.
Mr Itaoui, who teamed up last year with Rich Lister Brett Blundy to take over discount retailer Best & Less and has invested in numerous retail and real estate ventures alongside Mr Blundy, including Bras N Things, Honey Birdette and Aventus, will invest in RWC’s second real estate credit fund, which is targeting a $400 million raise.
The investment will be made through the Ray Itaoui Family Office, which owns a significant real estate portfolio, including Greenway Wetherill Park, a 28,000sq m large-format retail centre in Sydney’s south-west.
The $100 million mandate follows Mr Itaoui investing more than $50 million in RWC, as part of a decade-long relationship with the private investment company, founded by Ray White real estate boss Dan White.
“I’m excited to increase our investment with RWC as we diversify our investments in private credit,” Mr Itaoui said.
“I’ve had enormous success investing with RWC and our relationship with the White Family goes well beyond investments.”
Mr Itaoui, who famously turned around the Sanity Entertainment music retail business after convincing its founder, Mr Blundy to sell it to him for nothing in 2009 rather than spend $18 million shutting it down, went on to take on numerous executive roles within the Rich Lister’s private investment company BBRC. (Sanity closed the last of its physical stores last year, but continues to trade online).
He also invested alongside Mr Blundy in large-format retail centres that were later aggregated into ASX-listed real estate investment trust Aventus, which merged with David Di Pilla’s HomeCo Daily Needs REIT in 2021 in a $2.8 billion deal.
By investing in RWC’s second real estate credit fund, Mr Itaoui joins a wave of high-net-worth investors, family offices and institutional capital being funnelled into the private credit sector, which accounts for about 10 per cent of the commercial real estate debt market, but is forecast to grow to a quarter of the market by 2028.
Much of this capital is being lent to property developers in the form of construction loans and acquisition finance amid a pullback from the major banks, who consider property development and land assets too high risk.
RWC, which invests on behalf of the White family, institutional investors, family offices and private wealth managers, has deployed more than $2.6 billion in private credit since 2017 and almost $5 billion since 2001
In 2023, it launched its first real estate credit fund, which is now fully deployed across seven loans worth almost $300 million. These loans are projected to deliver a gross total return of more than 18 per cent per annum over the three-year term of the fund and a cash yield of about 6 per cent.
Alongside its real estate credit funds, RWC established a $500 million partnership with Hong Kong-based real estate private equity firm Gaw Capital in July to invest in private credit opportunities across Australia and New Zealand.
RWC’s second real estate credit fund had its first close in June 2024 and has already invested $350 million to date including in loans for residential and industrial projects. The fund is on track to deliver a gross return of more than 20 per cent over a 2–3-year term. It is due to hold its next close in early October 2024.
RWC founder and executive chairman Dan White said it was a great privilege to have the $100 million mandate from the Ray Itaoui Family Office.
“What started as a great friendship, has led to a successful investment partnership over time,” Mr White said.
“This investment will allow us to continue to execute our investment strategy in the private credit landscape and also highlights our ability to attract a diverse range of capital – from family offices to institutional investors, as evidenced by our recent mandate with Gaw Capital.”
