Sydney – Metrics Credit Partners, one of the country’s biggest private credit firms with about A$40 billion under management, announced on Wednesday that it has temporarily suspended investor redemptions from three of its listed funds. The move follows a disagreement with its auditor, KPMG, over the assumptions used in preliminary financial reports.
Funds affected and trading suspension
The three listed vehicles – the Metrics Real Estate Multi‑Strategy Fund, Metrics Income Opportunities Trust and Metrics Master Income Trust – have been halted from trading on the Australian Securities Exchange since Monday. Metrics disclosed that it had written down the asset values of these funds, prompting the exchange to suspend their units.
Auditor’s concerns
KPMG told Metrics that it could not sign off on the full‑year accounts for the three funds before the September 30 lodgement deadline. The accounting firm disagreed with the methodology used to calculate fair value for unlisted commercial real‑estate equity investments, a key component of the funds’ portfolios.
Impact on investors
Redemptions of units in the unlisted underlying funds that feed into the listed vehicles have been suspended temporarily, Metrics said. The firm added that the listed funds will remain suspended from trade until audited financial reports are submitted to the regulator.
Regulatory backdrop
Australia’s corporate regulator has recently warned the private‑credit industry about unrealistic valuations and weak governance practices. The regulator indicated that firms failing to meet its standards could face enforcement action.
This warning came after the collapse of property developer Bathla Group, which entered administration in August with A$3 billion owed to roughly 40 lenders. The episode underscored the exposure of the private‑credit market to the property sector, which has been under pressure from higher interest rates and recent housing‑tax changes.
Broader market context
The Australian private‑credit market has grown rapidly in recent years, attracting institutional investors seeking higher yields outside traditional banking channels. However, the sector’s heavy reliance on commercial‑real‑estate assets makes it vulnerable when property values decline.
Industry observers note that the current stress signals a need for tighter valuation standards and more transparent reporting. While the freeze is a setback for investors seeking liquidity, it also provides the firm an opportunity to address the auditor’s concerns and ensure that fund valuations reflect true market conditions.
Looking ahead
Metrics has not indicated a timeline for when the redemptions will resume or when the suspended funds will return to trading. The firm’s next steps will likely involve revisiting its valuation models and working closely with KPMG to achieve audit sign‑off.
Investors and market participants will be watching closely for further updates, as the outcome could set a precedent for how private‑credit firms handle valuation disputes and regulatory scrutiny in Australia’s evolving financial landscape.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
