Australia’s corporate regulator calls out ‘poor practices’ in private credit
ASIC warns it could act against firms in the booming sector over issues ranging from unrealistic valuations to opaque fees if standards do not improve.
Sydney, Australia - The Australian corporate watchdog, ASIC, has issued a stern warning that it may take action against poor practices in the private credit sector, which has experienced rapid growth and increased complexity. Commissioner Simone Constant stated that the recent collapse of property developer Bathla was not surprising, as the sector's valuation issues, opaque fees, and lack of transparency are concerning.
ASIC has been intensifying its scrutiny of the industry for 18 months, with a focus on valuations, liquidity, governance, conflicts, and transparency. The regulator estimates the private credit sector to be worth around A$200 billion (US$142 billion), with a significant portion invested in real estate lending. Constant emphasized that the tide is turning against poor private credit practices and that fund managers must prioritize strong governance and accurate valuations to avoid facing enforcement action.
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- Australia warns private credit industry of increased enforcement action privateequitywire.co.uk
- Australia’s corporate regulator calls out ‘poor practices’ in private credit freemalaysiatoday.com
