Australia’s corporate regulator said the country’s A$200 billion ($141.14 billion) private credit market must ensure asset valuations accurately reflect global economic upheaval as they finalise accounts for June 30, the end of the financial year.
The Australian Securities and Investments Commission, or ASIC, carried out a survey of 22 private credit managers from March until May.
The managers had oversight of 52 funds with a combined A$76 billion in assets.
The survey found pockets of higher defaults, impairments and loan amendments.
It said the current global economic upheaval presented the first real test faced by Australia’s private credit sector.
The sector is in its infancy compared to overseas markets, especially the U.S..
The survey found new funds were being established more slowly.
It found some “concentration risk” as property, development and construction emerged as a common asset held by the Australian funds.
“If valuations do not reflect current conditions and incorporate verified accurate information, there is a higher risk of misinformation and poor investor outcomes,” ASIC said
($1 = 1.4170 Australian dollars)
Reuters
