Australian investment managers believe they have an opportunity to raise funds for private debt portfolios over the next few years as banks adjust their balance sheets to meet their Basel III requirements.Perpetual entered the private debt market late in 2010 when it raised A$175 million of institutional funding for its Secured Private Debt Fund.The fund has produced an annualised return of 8.8 per cent since inception - an average margin of 414 basis points over the 90-day bank bill rate.Now Perpetual is in the market raising money for a second institutional fund and a retail fund.Assets are the sort of loans that Perpetual used to do in its now-defunct mortgage trust - the Monthly Income Fund. They are small business loans secured by a mix of commercial and residential property.Perpetual's group executive for income and multi sector, Richard Brandweiner, said: "There is dislocation in the commercial mortgage finance market. "We think the private debt market is opening up as a big opportunity over the next few years."The banks are making significant adjustments to meet net stable funding ratio requirements and other new balance sheet rules."Meanwhile, Westpac is making plans to sell around A$100 million of its leveraged loan portfolio into vehicles targeting superannuation funds and insurance companies, the Australian Financial Review reported on its website yesterday. Westpac's head of leveraged and acquisition finance, Greg Clark, confirmed to the AFR that the bank was in the early stages of creating a new "high yield loan product".