Australia’s corporate regulator has told the private-credit industry that its period of warnings is ending, after a review found weak governance, obscure fees and valuations that can disguise deteriorating loans.
The Australian Securities and Investments Commission said the market has grown to roughly A$200 billion and is heavily exposed to property lending. Commissioner Simone Constant said enforcement could follow where managers fail to value assets honestly, explain conflicts or protect investors when borrowers fall into distress.
The warning matters beyond specialist funds. Australians can encounter private credit indirectly through superannuation portfolios, while many property developers now rely on non-bank lenders for financing that traditional institutions will not provide. That makes valuation discipline central: keeping a troubled loan at face value may delay recognition of a loss while preserving management fees.
The collapse of property developer Bathla has sharpened the regulator’s concern. Preliminary creditor figures have placed the group’s debt above A$3 billion, much of it owed to secured lenders. ASIC is examining both wholesale and retail funds and has put trustees and institutional investors on notice that outsourcing investment management does not outsource responsibility.
