Westbrooke Yield Plus: Delivering stable 8% sterling returns through private credit

In a shifting global financial landscape marked by volatility and rising investor caution, Westbrooke Alternative Asset Management's Yield Plus fund is offering a compelling solution. Targeting private credit opportunities in the UK, the fund delivers a stable, net return of approximately 8% in hard currency, underpinned by asset-backed loans and rigorous risk management. With over £180 million under management and a seven-year track record without a down month, Yield Plus is increasingly seen by South African investors as a reliable alternative to traditional cash or bond holdings. Structured for tax efficiency and shorter durations, it meets the growing demand for predictable income.

Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.

Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.

If you prefer WhatsApp for updates, sign up to the BizNews channel here.

Watch here

Listen here

Edited transcript of the interview

Alec Hogg (00:09.646):
Dino Zuccollo is a Director of Westbrooke Alternative Asset Management and Head of Investor Solutions. We catch up every quarter, Dino, and I think there’s a lot of method in that. You guys decide on a quarterly basis how much you need to raise, and then you close out. Members of the business community like what you offer, which is private credit -
loans in hard currency that give a good return. For those who perhaps haven’t heard or watched our conversations yet, just give us, in a nutshell, an explanation of what the Westbrooke Yield Plus product is all about.

Dino Zuccollo (00:59.880):
Hi Alec, and to everyone watching - thank you for your time.
By way of a quick background, Westbrooke Alternative Asset Management is an integrated, South African-based alternative asset manager. We now have operations in South Africa, the UK, and the USA.

What we do is invest in private markets globally, with a focus on South African clients. So if you’re looking to invest in alternatives across those three geographies, Westbrooke is a well-respected name in South Africa that provides access to those global opportunities.

Westbrooke Yield Plus, in particular, is our flagship product in the UK. We make loans to sponsors and real estate owners in and around the UK - generally where there's property as security. The fund has been running for more than seven years and currently holds £180 million.

The objective is to generate a stable, predictable income stream, paid quarterly, of between 7% and 9% in sterling - without taking on material capital risk at the underlying level.

Many of our clients use Westbrooke Yield Plus as an alternative to cash, bonds, or other fixed income - not just because the returns are higher, but because the structure is tax-efficient.

And, of course, as we’ll discuss further, it’s also not as correlated to what you’re seeing in the wider markets.

Alec Hogg (02:30.040):
Why would people borrow from you rather than just going to a bank?

Dino Zuccollo (02:35.132):
In the UK, Alec, it’s an extremely structured market, and it’s largely segmented by size. If you're a property owner looking to borrow less than £20 million, that’s not really a space UK banks operate in. In South Africa, if you want a loan of that size, you’d typically go to a structured finance team at RMB or Investec for good service. But in the UK, for smaller loans, that service just doesn’t exist.

So in Westbrooke Yield Plus, we focus on loans under £20 million. We also target areas where banks don’t usually operate - typically for two reasons.

First is complexity. UK banks tend to follow a rigid, cookie-cutter approach. If something doesn’t tick all the boxes, it takes a long time - or gets rejected entirely.

Second is duration. We don’t like making five-year loans. We're not in the business of making long-term bets, and our clients want liquidity within shorter timeframes. So our loans usually span 18 to 36 months.

Alec Hogg (03:54.350):
So it's a very specific niche. And I think business professionals get it: when you focus on a niche and dominate it - or become a key player - you can enjoy superior returns with relatively low risk. From a risk perspective, how is your portfolio diversified so that investors don’t lose their money?

Dino Zuccollo (04:26.716):
Great question. The fund currently has 42 loans in the portfolio, and our largest single exposure is only 6.8%. So we’re highly diversified and very conservative from a risk standpoint. We lend across a broad range of real estate subsectors.

Another key point: Westbrooke is an income lender. That means we lend against standing properties that are generating income - typically with long leases in place. We don’t invest in developments or land, and I think that’s crucial.

In my experience, clients often understand returns better than they understand risk. They might think 7% is better than 5%, and worse than 10%, but don’t always consider what level of risk comes with those returns.

Our objective is to do the kinds of transactions banks should be doing - but don’t. That’s the safest part of the capital stack. And after seven years with no down months, we’re proud to offer higher returns without taking undue risk.

Alec Hogg (05:55.192):
How have things gone in the most recent quarter, especially considering all the global chaos - Trump, tariffs, etc.? It seems the UK has struck a deal with the US, so there’s some good news there. But how is the UK market operating right now?

Dino Zuccollo (06:17.106):
Great question - and a long answer. I’ll stick to the key points.

This past quarter was dominated by discussion around “Liberation Day” and Donald Trump’s tariffs. We’ve seen high volatility. Initially, many transactions stalled as borrowers paused to assess the impact of the tariffs.

At Westbrooke, we did a full bottom-up portfolio review. Thankfully, none of our loans are directly affected by the tariffs. That said, the concern now is around second and third-order effects - things like inflation and recession risks that might indirectly affect our borrowers.

Markets are still pricing in interest rate cuts this year, which is positive for real estate. Lower rates usually mean higher valuations. But if tariffs end up being inflationary, we might see the opposite.

On the ground, we’re cautious around sectors like retail and hospitality, which are more exposed. But the UK is largely a services economy, not a big trading economy, and it’s been spared from the steepest tariffs. That’s a positive for investors.

Lastly, when volatility strikes, many lenders pull back. That creates opportunities for entrepreneurial lenders like us. So while we’re monitoring the landscape closely, we’re optimistic about picking up strong deal flow.

Alec Hogg (09:31.022):
Have some of those potential borrowers who paused their deals now hit play again?

Dino Zuccollo (09:44.262):
Yes, they have.
When events like this happen, both borrowers and investors typically stop and wait.

In South Africa, the tariffs came just before Easter and a string of public holidays, so many investors took a “let’s wait and see” approach.
But on the borrower side in the UK, it was more about assessing potential impacts. That’s now largely behind us, and many of those transactions have resumed - and concluded, albeit with slightly different pricing.

Alec Hogg (10:48.206):
That’s fascinating. I’ve always liked Warren Buffett’s advice: ignore the drama and think five years ahead. A friend of mine who knows Trump said, “Don’t take him literally, but take him seriously.”
He wants better deals for the US, but these extreme tariffs are just bluster. Still, the UK’s favorable status should encourage investors, right?

Dino Zuccollo (11:56.710):
Exactly. While I don’t know Trump personally, his strategy seems to be creating global chaos to get negotiating leverage. That’s clearly what’s happened with the tariffs. He goes in strong, creates volatility, and then gets parties to the table to strike a deal.

For our clients, it’s a reminder of why you need diversification - away from public markets and into assets that don’t behave the same way. This has never been clearer. Alternative assets like private credit are more relevant now than ever.

Alec Hogg (13:02.680):
Right, we’ve taken certain things for granted - like equities always rising.
Suddenly, that’s not a given anymore. So what’s your view on the right spread between equities and fixed interest?

Dino Zuccollo (13:40.584):
It’s a tough one, Alec. The market has structurally changed. From the 1970s to 2020, we were in a secular decline in interest rates. Inflation was low, growth was high, and people built 60/40 portfolios - 60% equities, 40% bonds.

The idea was: if equities fall, bonds cushion the blow. But today, interest rates are higher, inflation is back, and bonds and equities are now positively correlated. That shock absorber effect has weakened.

Add to that: the number of listed companies has halved in places like the US and South Africa. There’s more concentration and more correlation.

That’s where alternatives come in - because if you want uncorrelated returns, you need to look beyond traditional markets. The current thinking is shifting to a 40-30-30 model: 40% equities, 30% bonds, and 30% alternatives - including private credit, hedge funds, private equity, and infrastructure.

Alec Hogg (16:18.562):
Where would gold and Bitcoin fit into that picture?

Dino Zuccollo (16:23.910):
Good question. Gold is probably more of a portfolio diversifier than a true alternative.

Bitcoin, to me, is a fringe alternative - lacking the stability clients usually want. The core alternatives today are private credit (the fastest growing), private equity, hedge funds, and infrastructure.

Alec Hogg (17:14.094):
And the banks? Haven’t they seen private credit as a threat? Are they moving into the space?

Dino Zuccollo (17:35.334):
They definitely see it as a threat, but they can’t really compete. Private credit funds are like unregulated banks.

At Westbrooke Yield Plus, we have a six-month lock-in period. We don’t promise instant withdrawals. Banks do - and that’s why they’re tightly regulated. They’re structurally mismatched.

So banks have chosen to focus on large, long-term loans where the borrower’s priority is getting the lowest possible interest rate.
Private credit funds focus on the rest - flexible, short-term, bespoke deals.

Alec Hogg (19:04.066):
You mentioned at the beginning that every quarter you assess your funding needs. Is the next tranche looking larger? Is deal flow improving?

Dino Zuccollo (19:37.894):
Yes, very much so.
The current volatility has created more opportunities as traditional lenders pull back.

That said, our average loan size is £5–10 million. Even four deals can require over £20 million of capital. The UK is a large market, so we don’t need many deals to deploy significant capital. But we’ll never chase scale over quality. And from the client side - I’ve never seen more demand. The desire for stable, predictable returns is stronger than ever.

Alec Hogg (20:56.288):
And with a juicy yield in hard currency, I’d imagine the sophisticated investor is all over it. Are there any minimums to participate?

Dino Zuccollo (21:19.592):
Yes. The Yield Plus fund delivers about 8% net in sterling. Compare that to 3–4% from a UK bank account - or 4.5–5% on a fixed deposit - and then factor in tax. Bank interest is taxed at 45% for high-income South Africans. In our fund, income is structured as a dividend via Jersey, usually taxed at 20%.

So on an after-tax basis, you're earning about three times what you'd get from a bank - without increasing your risk profile.

The minimum investment directly into the fund is £100,000. But if you want to invest a smaller amount, talk to your wealth advisor. Many South African wealth managers have pooled investment vehicles that access Westbrooke.

If your advisor doesn’t work with us, they’re welcome to reach out.

Alec Hogg (23:05.568):
And if you don’t have a wealth advisor - just contact Westbrooke directly and I’m sure you’ll point them in the right direction.
Dino Zuccollo, Head of Investor Solutions at Westbrooke Alternative Asset Management. I’m Alec Hogg from BizNews.com.