US housing inventory is increasing slowly as sales have declined in recent months
Warburg Pincus has built a strong presence in Australia in the past six years.

U.S. private equity firm Warburg Pincus has announced an investment of AU$490 million in Australia's MA Financial Group's AU$1 billion real estate credit vehicle to boost credit solutions to address the funding gap in the country's residential market.

MA Financial's joint CEO Julian Biggins stated the investment will support the company to bridge key gaps in the country's underserved residential market.

"Warburg Pincus' investment serves as a strong endorsement of MA Financial and reinforces their confidence in our real estate investment and debt structuring capabilities," Biggins said. "With the commitment and support of Warburg Pincus and the encouraging responses received from like-minded global investors regarding this strategy, we are optimistic about the vehicle's potential for future success."

The Sydney-based firm, which was the Australian affiliate of investment giant Moelis & Co, will provide and oversee loans for Australian developers and projects through the real estate credit fund, Reuters reported.

"Over the next five years, the cumulative dwelling shortage is projected to reach approximately 254,000 units, alongside an anticipated 30% increase in annual population growth," said Takashi Murata, managing director and co-head of Asia Real Estate and head of Japan at Warburg Pincus.

The investment, made through Warburg Pincus's Asian real estate fund, came in the wake of Australian property companies increasingly raising real estate credit funds to capitalize on the housing market.

Over the past six years, Warburg Pincus has built a strong presence in Australia, supporting portfolio companies like ESR and StorHub and through joint ventures.

"We have built a strong conviction in the secular tailwinds of Australia's residential market, driven by the immigration-led population growth and the undersupply of housing primarily due to a tight credit environment and higher construction costs. The new vehicle will help meet the demand from sophisticated borrowers as Australia tackles its nationwide housing shortage," Murata said.

With over AU$83 billion in assets under management, Warburg Pincus manages over 225 companies across the globe.