Major Australian private lender suspends three ASX funds, cuts asset values after audit

Sydney, September 28 - Australia's largest private credit lender Metrics Credit Partners has halted trading in three of its ASX-listed funds and reduced their asset values after auditors disputed the assumptions used in preliminary financial reports. The firm, which manages approximately A$40 billion, suspended trading in the Metrics Real Estate Multi-Strategy Fund, Metrics Income Opportunities Trust, and Metrics Master Income Trust prior to the market opening.

Metrics disclosed that auditor KPMG reached differing conclusions regarding inputs and probability weightings compared to those utilized in the preliminary financial report. As a result, the net tangible asset values of the three funds were adjusted downward by 12.16%, 10.08%, and 1.99% respectively.

The Real Estate Multi-Strategy Fund's asset value was reduced from A$2.53 to A$2.22 per unit, while the Income Opportunities Trust and Master Income Trust saw their values decrease from A$2.53 to A$2.29 and A$2.30 to A$2.24 per unit, respectively. The fund's last trading price was A$1.68.

The decline in asset values is primarily due to a decrease in the fair value of unlisted commercial real estate equity investments. Metrics added that the auditors gave more weight to potential downside scenarios and less favorable outcomes during the finalization of the audited results. This process also led to higher provisions for potential losses on loan exposures, reflecting factors such as interest rate and macro-economic conditions, as well as heightened regulatory expectations for specific assets and the portfolio.