Metrics freezes redemptions as Australian private credit pressures mount
Australian private credit manager Metrics Credit Partners has temporarily suspended redemptions from a number of underlying unlisted funds, according to a report by Reuters, adding to signs of strain across the country’s fast-growing non-bank lending market. The move comes after auditor KPMG declined to sign off on the full-year accounts of three listed Metrics vehicles.
Metrics Credit Partners, a leading private credit firm in Australia, has imposed restrictions on investor redemptions from certain funds and postponed the release of financial reports, indicating growing instability in the non-bank lending sector. The company, which oversees approximately A$40 billion, revealed on Wednesday that its auditor KPMG would not certify full-year accounts for three listed funds ahead of a September 30 submission deadline.
These three funds - Metrics Real Estate Multi-Strategy Fund, Metrics Income Opportunities Trust and Metrics Master Income Trust - have been barred from trading on the stock exchange since Monday following Metrics' disclosure of asset write-downs. Furthermore, redemptions of units in the unlisted funds that feed into the listed vehicles have been temporarily suspended, according to Metrics.
The listed funds will remain halted from trading until audited financial reports are filed, Metrics added. KPMG has disputed the assumptions employed in the preliminary financial reports for the listed funds, particularly in relation to the valuation of unlisted commercial real estate equity investments. Earlier this week, Australia's corporate regulator cautioned about the potential for unrealistic valuations and inadequate governance practices within the private credit industry, warning that firms failing to meet its standards may face enforcement action.
This advisory came in the wake of the downfall of property developer Bathla Group, which owed A$3 billion to around 40 lenders when it entered administration in August.
Australia's private credit market has witnessed rapid growth and is heavily reliant on the property market, which is experiencing a downturn due to higher interest rates and alterations to housing taxes.
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