Australia’s corporate regulator has pressed the country’s private credit industry to refresh asset valuations to reflect the effects of international market strain as firms finalise financial statements for the year ending June 30.
The Australian Securities and Investments Commission, or ASIC, conducted a survey of 22 private credit managers between March and May. Those managers had oversight of 52 funds with combined assets of A$76 billion.
According to ASIC’s findings, the survey identified pockets of higher defaults, impairments and loan amendments among the funds covered. The regulator said the current global economic upheaval represents the first real test for Australia’s private credit sector.
ASIC noted the sector remains at an early stage relative to offshore markets - particularly the U.S. - and that new funds are being established more slowly than before. The review also highlighted some "concentration risk" as property, development and construction emerged as commonly held assets across the surveyed 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.
The regulator’s message underscores the need for valuations to be grounded in verified, up-to-date information as managers prepare year-end accounts. ASIC’s intervention aims to reduce the chance that stale or overly optimistic pricing will mask credit deterioration or obscure the true risk profile of funds.
For context on scale, Australia’s private credit market is estimated at about A$200 billion ($141.14 billion). The regulator provided an explicit exchange rate reference: $1 = 1.4170 Australian dollars.
ASIC’s survey results raise questions about portfolio concentration and the pace of fund formation in a market that is still developing compared with larger overseas private credit ecosystems. The regulator’s emphasis on valuation accuracy speaks directly to investor protection concerns as managers close their books at the financial year end.