Lender Metrics Credit Partners has taken a big step up in the corporate finance market, announcing that it will acquire Investec’s Australian corporate loan portfolio.

The Investec book is worth more than A$1 billion and will take Metrics’ assets to more than $7.5 billion. Investec’s resource, project and infrastructure loan portfolios were not included in the deal.

Investec announced last year that it was getting out of the Australian market, as part of a move by Investec Bank plc to simplify its business. APRA data put its total resident assets at the end of January at $877 million.

Metrics funds its lending through a series of wholesale managed funds and institutional mandates.

The group’s managing partner Andrew Lockhart said in a statement that the acquisition would enhance the diversity and liquidity in its funds and lead to an increase in expected total returns to investors.

Metrics was established in 2013 by a group of ex-NAB corporate bankers. It participates in syndicates and club loans and originates on a bilateral basis. It lends right through the capital structure, including structuring equity returns through warrants and options.

It lends between $50 million and $100 million on an investment grade loan, and between $25 million and $50 million on a sub-investment grade loan.

Lockhart sees plenty of opportunity for non-bank corporate lenders. “Our view is that the banks are not the natural holders of the loan assets we manage. The capital requirements are too onerous these days and the margins are too low for them,” he said.

Metrics’ flagship fund, the $1.3 billion ASX-listed MCP Master Income Trust, has produced a net return of 5.3 per cent a year since it was launched in 2017. Over the 12 months to the end of February it paid a distribution yield of 4.8 per cent.