Sydney – Metrics Credit Partners, one of Australia’s largest private‑credit managers with roughly A$40 billion under management, announced on Monday that trading in three of its ASX‑listed funds has been suspended. The move follows an audit by KPMG that identified differing assumptions and probability weightings used in the funds’ preliminary financial reports.
Funds affected and valuation adjustments
The three funds impacted are the Metrics Real Estate Multi‑Strategy Fund, the Metrics Income Opportunities Trust, and the Metrics Master Income Trust. In filings with the Australian Securities Exchange, Metrics disclosed that KPMG’s review led to a reduction in net tangible asset values of 12.16% for the Real Estate Multi‑Strategy Fund, 10.08% for the Income Opportunities Trust, and 1.99% for the Master Income Trust.
Specifically, the Real Estate Multi‑Strategy Fund’s unit price was adjusted from A$2.53 to A$2.22, reflecting a lower fair‑value assessment of unlisted commercial real‑estate equity holdings. The fund last traded at A$1.68 before the suspension.
Reason for the markdown
Metrics said the audit process gave greater weight to downside scenarios and less favourable potential outcomes. The company also increased provisions for potential loan‑losses across the three funds, citing “interest‑rate and macro‑economic conditions and heightened regulatory expectations as applied to specific assets and the portfolio.”
Industry context
The announcement arrives amid heightened scrutiny of Australia’s booming private‑credit sector. Recent regulatory warnings have highlighted concerns about unrealistic valuations and governance practices. The corporate regulator has urged firms that fail to meet standards to prepare for possible enforcement action.
One high‑profile case that intensified the focus on the sector was the collapse of property developer Bathla, which entered administration owing A$3 billion to about 40 lenders. Metrics clarified that it has no exposure to Bathla.
Implications for investors
Investors in the suspended funds will need to await further updates from Metrics and the ASX regarding the timeline for resuming trading and any additional adjustments. The firm’s proactive approach to addressing audit findings demonstrates a commitment to transparency and to aligning asset valuations with regulatory expectations.
While the markdowns represent a notable reduction in reported asset values, Metrics emphasized that the adjustments reflect a more conservative assessment of market conditions rather than an indication of underlying asset deterioration.
Looking ahead
Metrics Credit Partners will continue to work with KPMG and the ASX to finalize audited results and to ensure compliance with evolving regulatory standards. The firm’s actions underscore the importance of rigorous valuation practices in the private‑credit industry, particularly as investors seek confidence in fund performance amid a shifting economic landscape.
For further details, investors can refer to the company’s filings on the ASX website.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
