ASIC flags initial cracks in Australia’s private-credit market amid fund redemptions
ASIC warned that Australia’s private-credit sector is showing its first major stress signs, citing recent fund redemption limits and high-profile borrower failures.
Australia’s corporate watchdog ASIC announced that the private-credit arena is encountering its initial serious challenges, after several large borrowers defaulted and major funds imposed redemption limits. Speaking in Sydney, ASIC chair Sarah Court highlighted the sector’s lighter regulation compared with banks and warned that “first significant cracks” are emerging. Reserve Bank governor Michele Bullock added that the opacity of leverage and exposure in the market fuels worry.
The distress was illustrated by the administration of NSW developer Bathla, the bankruptcy of Jon Adgemis’s hospitality businesses, and liquidity-tightening moves by lenders such as Merricks, Longreach Credit, Centuria Bass and MA Financial, which capped withdrawals at 1 percent per month. In response, the Financial Services Council released a new private-credit standard aimed at reducing consumer risk, a step welcomed by ASIC. The regulator plans to release a further update on its private-credit review later this year.
Why it matters
The story signals growing risk in a credit market that holds many Australians' retirement savings.
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