Key Takeaways
- • The Alternative Investment Management Association (AIMA) and its private credit affiliate, the Alternative Credit Council, issued new guidance for private credit managers aimed at tightening governance, lifting lending standards, and improving transparency and investor protections.
- • The guidance is based on the Australian Securities and Investments Commission's (ASIC) 10 principles for "private credit done well."
- • The framework covers six areas: sound lending and risk management, greater transparency, clear and consistent valuations, improved liquidity management, greater fee transparency around investor distributions, and stronger management and disclosure of conflicts of interest.
- • AIMA collaborated with 20 member firms, including private credit managers, investors, law firms, fund administrators and auditors, to develop the guidance.
- • AIMA Australia managing director Michael Gallagher said the sector is displaying good practices overall, and AIMA plans educational events to support adoption in 2027.
Summary
AIMA and the Alternative Credit Council have released new guidance for private credit managers designed to strengthen governance, raise lending standards, and enhance transparency and investor protections, according to Capital Brief. The guidance is built on the 10 principles for "private credit done well" published by the Australian Securities and Investments Commission.
The guidance addresses six areas: sound lending and risk management; greater transparency; clear and consistent valuations; improved liquidity management; greater fee transparency around investor distributions; and stronger management and disclosure of conflicts of interest.
In developing the framework, AIMA worked with 20 of its member firms spanning private credit managers, investors, law firms, fund administrators and auditors. AIMA managing director and head of Australia Michael Gallagher told Capital Brief that the private credit sector is displaying good practices overall. He described the process as providing "a pretty good helicopter view of the whole industry" and a collegiate perspective on what participants believe should be done.
Gallagher said the guidance is intended to be a "living document" that AIMA will work with members on going forward into next year. AIMA has already planned a series of educational events to examine the document in greater detail and to reinforce sound practices that many members are already adopting.
The guidance addresses six areas: sound lending and risk management; greater transparency; clear and consistent valuations; improved liquidity management; greater fee transparency around investor distributions; and stronger management and disclosure of conflicts of interest.
In developing the framework, AIMA worked with 20 of its member firms spanning private credit managers, investors, law firms, fund administrators and auditors. AIMA managing director and head of Australia Michael Gallagher told Capital Brief that the private credit sector is displaying good practices overall. He described the process as providing "a pretty good helicopter view of the whole industry" and a collegiate perspective on what participants believe should be done.
Gallagher said the guidance is intended to be a "living document" that AIMA will work with members on going forward into next year. AIMA has already planned a series of educational events to examine the document in greater detail and to reinforce sound practices that many members are already adopting.
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