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ASIC slams $250bn private credit sector over investor risks
Australia's financial regulator says the private credit industry is failing to disclose risks to investors, and most Australians are exposed through their superannuation.
In brief
Australia's financial regulator says the private credit industry is failing to disclose risks to investors, and most Australians are exposed through their superannuation. ASIC found private credit funds hide risks and fees from investors through opaque practices, leaving most Australians exposed via superannuation…
ASIC's frustration with private credit
ASIC commissioner Simone Constant said the regulator is fed up with the private credit sector's indifference to cracking down on poor lending practices.
“I am absolutely fed up, at ASIC we are absolutely fed up”
What ASIC found in its surveillance
ASIC's second major surveillance report reviewed twenty four wholesale and retail private credit funds with eighteen billion dollars in combined assets under management between November two thousand twenty five and August two thousand twenty six.
Persistent disclosure problems
ASIC found many investors are not given information needed to understand risks, fees and conflicts in private credit investments.
“Many investors are still not being given the information they need to properly understand the risks, fees and conflicts present in private credit investments”
ASIC's enforcement actions
ASIC has initiated six interim stop orders and multiple referrals for enforcement investigation. This week it prevented Angas Securities Limited from offering interests in two managed investment schemes over inadequate disclosure of its financial position…
Stress in the private credit sector
Private lender CVS Lane limited investor redemptions this year after significant loans to collapsed developer Bathla. US private credit firm Blue Owl also limited withdrawals as souring software investments caused the company to bleed value.
Industry sets new standards
The Alternative Investment Management Association and Alternative Credit Council released new guidance for Australian private credit managers setting out recommended practices to strengthen governance, lending standards, transparency and investor protection.
Most Australians are exposed
ASIC commissioner Simone Constant said working Australians through their superannuation funds means pretty much every Australian has exposure to private credit investments.
“pretty much every Australian has exposure to private credit investments”
The takeaway
ASIC found private credit funds hide risks and fees from investors through opaque practices, leaving most Australians exposed via superannuation.
