The Liquidity Illusion

The private credit industry rarely asks how does the liquidity feature in a listed fund structure actually benefit the investor holding it? It provides certainty that they can access their capital at a moments notice but at what price?

The NTA discount in listed markets is persistent, it is structural, and it exists often times regardless of underlying portfolio performance. Investors are paying for an exit mechanism they almost never use.

What the listed structure actually does

A loan secured against commercial property does not become liquid because it sits inside an ASX-listed trust. The underlying asset is the same. The cash flows are the same. The listed wrapper introduces a second layer of pricing risk with no connection to the quality of the underlying loans.

The secondary market for listed units prices on sentiment, discount dynamics, and the collective willingness of other investors to buy. In benign conditions, the discount is modest. In periods of market stress, it widens - sometimes significantly. That is precisely when investors most want to exit and precisely when the underlying portfolio least deserves a haircut.

Engineered liquidity does not smooth risk. It concentrates it at the point of exit.

The data

QRI, the Qualitas Real Estate Income Fund (QRI), is one of the more credible listed real estate credit vehicles on the ASX. As at 13 April 2026, its reported Net Tangible Assets (NTA) was $1.60 per unit. It was trading at $1.56, a discount of approximately 2.8%.

This is not a distressed situation. The portfolio is performing. Qualitas operates one of the larger real estate credit platforms in Australia. The discount exists because the listed structure creates pricing uncertainty the market charges investors for, continuously, regardless of underlying performance.

An example of a period of stress is following COVID-19 induced market panic in early 2020. Units in QRI experienced significant discount to NTA. The peak discount in March 2020 was over 40% or approximately 35% to NTA, with price falling to a low of $1.03. This later rapidly recovered over the course of a couple of months with the manager reporting no impairments to the underlying loan.

The pattern holds across the listed alternative income universe. Bell Potter publishes weekly NTA and premium/discount data for every ASX-listed LIC and LIT. The discount to NTA is the norm for funds holding illiquid underlying assets inside a listed wrapper. Data available via: firstlinks.com.au/lic-reports

What investors should be asking

The right question when evaluating a private credit fund is not how easy it is to exit. It is whether the underlying portfolio deserves conviction and whether the vehicle structure adds cost and complexity without adding genuine protection.

Unlisted structures remove the listed discount entirely. Investors receive returns that reflect the actual performance of the loan book, not the sentiment of the secondary market. The trade-off is a defined redemption process rather than daily ASX liquidity. For most investors in this asset class, that is a trade-off they never need to make.

The persistent NTA discount in listed credit funds is not a footnote. It is the annual invoice for a liquidity feature most investors never collect on. Over a five to seven year holding period, that cost compounds into a material drag on net returns.

Four questions worth asking before allocating to any listed credit structure:

• What has the NTA discount ranged over three years, and what drove the widest periods?
• How liquid is the secondary market for these units - what is the average daily traded volume relative to fund size?
• If you needed to exit in a period of market stress, what discount to NTA would you expect to accept?‍
• Would you be better served by the unlisted equivalent of the same strategy?

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Important Disclaimer

This document in its entirety is provided by Ekam Capital Pty Ltd (ACN 653 511 338) (Investment Manager) directly to wholesale clients and is strictly for information and discussion purposes only.

This document does not in any way constitute an invitation or offer in relation to any financial product. No reliance may be placed on this document for any purpose nor used for the purpose of making a decision about a financial product or transaction.

The authority of the Investment Manager, a corporate authorised representative (number 001298708) of Avenir Capital Pty Ltd ABN 40 150 790 355 (AFSL 405469), is limited to general advice and arranging services to wholesale clients relating to the Ekam Real Estate Credit Fund only.

This communication is for general information only and has not been prepared taking into account any person's objectives, financial situation or needs. The information contained in this document is not intended to be investment advice.

The Fund's Information Memorandum (IM) dated 27 November 2025, issued by Ekam Capital Pty Ltd ACN 653 511 338, offers investors an opportunity to subscribe for units in the Fund. If you would like to receive a copy of the IM, please email: investors@ekamcapital.com.au

Prospective investors should carefully consider the contents in the IM in full and seek professional advice prior to making any investment decision. Past performance and/or forward-looking statements are not a reliable indicator of future performance.

Except as required by law, neither the Trustee, the Investment Manager nor its affiliates warrant or guarantee the accuracy, validity, timeliness, or completeness of any information or data (whether prepared by us or a third party). The projections in this marketing material are based on assumptions and analysis of the Investment Manager and are forward-looking statements, not guarantees of future performance.

Actual results may differ significantly due to market, economic, and regulatory factors. Target returns are after fees and expenses but before tax.

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