(21 March 2025 – Australia) The Australian Securities and Investments Commission (ASIC) is scaling up its scrutiny of the private credit sector, pushing for specific governance, valuation modelling and investor protection measures details by mid-April.
Now representing A$205 billion of the total loan market, ASIC has moved to increase surveillance following a series of prominent defaults and collapses in the sector. The world’s largest asset manager, BlackRock, has estimated that the private credit market could reach US$3.5 trillion by 2028.
ASIC is conducting its probe into the private credit sector in two stages, initially focusing on private credit funds that have raised money from wholesale investorsbefore examining practices of private credit funds that have raised money from retail investors and are subject to more stringent disclosure requirements.
Private credit is offering speed, flexibility and variety to smaller companies banks can’t match, Capital Brief reports.
“The surge in interest in Australian private credit mirrors a global trend. Globally, private credit alone has quadrupled over a decade to reach US$2.1 trillion. As interest and lending rates rose in recent years, operators and investors have breezily collected double-digit returns. The market has been flooded with new, smaller entrants, and liquidators say that many are inexperienced in dealing with “workouts” or ensuring investors do not lose money when borrowers default” stated AFR Senior Reported Jonathan Shapiro.