Key Takeaways
- • ASIC has opened a formal investigation into Bathla Group's conduct prior to its collapse, according to ASIC commissioner Simone Constant, who spoke to Capital Brief.
- • ASIC's second private credit surveillance report reviewed 24 wholesale and retail private credit funds and found that improvement since the last round has not been consistent.
- • Eighteen of the 24 funds used multiple layers of intermediary entities, including SPVs, fund-of-funds structures and warehouse vehicles, and some did not disclose these clearly to investors.
- • Only two of the 24 funds pass on the full economic benefit of interest and borrower fees to investors.
- • ASIC is making inquiries into private lenders but has not commenced formal investigations into any lenders.
Summary
The Australian Securities and Investments Commission (ASIC) has begun a formal investigation into Bathla Group, as it released its latest surveillance report into the private credit sector. According to ASIC commissioner Simone Constant, speaking to Capital Brief, the investigation concerns Bathla Group's conduct before its collapse.
ASIC released its second private credit surveillance report, which reviewed 24 wholesale and retail private credit funds. Constant said, "We have not seen enough improvement on a consistent basis from funds since our last round of surveillance." While some improvement was observed, she described it as "disappointing" that shortcomings remain in disclosure and transparency, particularly in complex and opaque fund structures, as well as the potential for perverse incentives or misalignment of incentives.
The report found that 18 of the 24 funds used multiple layers of intermediary entities, including special purpose vehicles (SPVs), fund-of-funds structures and warehouse vehicles, and that some funds did not clearly disclose these structures to investors. ASIC also found that only two funds pass on the full economic benefits of interest and borrower fees to investors.
The retail funds reviewed included those managed by Ares, Australian Secure Capital Fund, Bentham, CFMG Capital, Murdoch Clarke Mortgage Management, Remara, RMBL Investments, Skyring Asset Management, Solas Asset Management, Pengana Capital Group, TPT Wealth and Trilogy Funds Management. Wholesale funds reviewed included those from Apollo, Aura Funds Management, Australia Pacific Income Fund, Avari Capital Partners, Finexia Securities, GCI Funds, iPartners, Metrics Credit Partners, Merricks Capital, Mosaic Private, Rixon Capital and Wingate Investment Partners.
While ASIC is making inquiries in relation to private lenders, it has not commenced any formal investigations into those lenders.
ASIC released its second private credit surveillance report, which reviewed 24 wholesale and retail private credit funds. Constant said, "We have not seen enough improvement on a consistent basis from funds since our last round of surveillance." While some improvement was observed, she described it as "disappointing" that shortcomings remain in disclosure and transparency, particularly in complex and opaque fund structures, as well as the potential for perverse incentives or misalignment of incentives.
The report found that 18 of the 24 funds used multiple layers of intermediary entities, including special purpose vehicles (SPVs), fund-of-funds structures and warehouse vehicles, and that some funds did not clearly disclose these structures to investors. ASIC also found that only two funds pass on the full economic benefits of interest and borrower fees to investors.
The retail funds reviewed included those managed by Ares, Australian Secure Capital Fund, Bentham, CFMG Capital, Murdoch Clarke Mortgage Management, Remara, RMBL Investments, Skyring Asset Management, Solas Asset Management, Pengana Capital Group, TPT Wealth and Trilogy Funds Management. Wholesale funds reviewed included those from Apollo, Aura Funds Management, Australia Pacific Income Fund, Avari Capital Partners, Finexia Securities, GCI Funds, iPartners, Metrics Credit Partners, Merricks Capital, Mosaic Private, Rixon Capital and Wingate Investment Partners.
While ASIC is making inquiries in relation to private lenders, it has not commenced any formal investigations into those lenders.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.