Key Takeaways
- • MA Financial has suspended all redemptions and applications for its MA Secured Loan Series Fund, a $2.3 billion private credit portfolio, following a temporary 1% redemption cap imposed in August.
- • The ASX-listed manager will wind up the MA Secured Real Estate Income Fund, which had about $117.39 million in AUM at June-end and was closed to applications after its responsible entity decided on October 19 to terminate it.
- • Management attributes the pressure to a deteriorating Australian residential construction and development market, which is extending timeframes for asset sales and loan refinancings and weighing on investor sentiment.
- • Group AUM rose 18% year on year to $15.7 billion as at September-end, and management says real estate private credit, about 15% of AUM, is the only challenged segment.
- • MA Financial says the fund will continue monthly distributions to investors while it manages the orderly wind-down of the loan book.
Summary
MA Financial has suspended all redemptions and applications for its MA Secured Loan Series Fund, a $2.3 billion private credit portfolio, according to a September-quarter update from the ASX-listed alternative asset manager. The decision escalates a temporary redemption limit of 1% of the fund's assets under management that the firm imposed in August. The company described the suspension as a "prudent measure to assist in the orderly management of the fund in the coming months in the face of less certain repayment timings from some borrowers." The fund expects to continue paying monthly distributions. The loan portfolio is generally secured by registered first mortgages over Australian real estate assets.
The firm also said it will wind up the MA Secured Real Estate Income Fund. Its responsible entity decided to terminate the unlisted unit trust on October 19, and the fund is now closed to applications. At June-end it held about $117.39 million in AUM. The fund aimed to preserve capital and deliver monthly income of the RBA cash rate plus 3.75% per annum over a rolling 12-month period.
MA Financial attributed outflows to headwinds in the residential housing construction and development market. In its words, "Private credit fund outflows remained elevated as headwinds arising from the current challenges in the residential housing construction and development market has impacted investor sentiment," and "Deteriorating residential real estate market conditions are extending timeframes for some asset sales and maturing loan refinancings." When it imposed the August restriction, the company cited higher inflation and interest rates, softer residential property conditions, and federal government changes to negative gearing and capital gains tax, which it said added to uncertainty. It had also anticipated that press speculation about other private credit managers could lift redemption requests. The firm stated it has no exposure to the collapse of Bathla Group, which became a flashpoint for the local private credit sector.
Group-level figures remained strong. Total AUM rose 18% year on year to $15.7 billion as at September-end. The company lends across property, corporate and specialty finance and also provides corporate advice. Joint chief executives Julian Biggins and Chris Wyke said most business segments were "performing strongly." They said real estate private credit, which represents around 15% of overall AUM and a significantly smaller share of earnings, had proved challenging, while asset-backed private credit, operating real estate such as pubs and marinas, and core real estate continued to perform strongly.
The firm also said it will wind up the MA Secured Real Estate Income Fund. Its responsible entity decided to terminate the unlisted unit trust on October 19, and the fund is now closed to applications. At June-end it held about $117.39 million in AUM. The fund aimed to preserve capital and deliver monthly income of the RBA cash rate plus 3.75% per annum over a rolling 12-month period.
MA Financial attributed outflows to headwinds in the residential housing construction and development market. In its words, "Private credit fund outflows remained elevated as headwinds arising from the current challenges in the residential housing construction and development market has impacted investor sentiment," and "Deteriorating residential real estate market conditions are extending timeframes for some asset sales and maturing loan refinancings." When it imposed the August restriction, the company cited higher inflation and interest rates, softer residential property conditions, and federal government changes to negative gearing and capital gains tax, which it said added to uncertainty. It had also anticipated that press speculation about other private credit managers could lift redemption requests. The firm stated it has no exposure to the collapse of Bathla Group, which became a flashpoint for the local private credit sector.
Group-level figures remained strong. Total AUM rose 18% year on year to $15.7 billion as at September-end. The company lends across property, corporate and specialty finance and also provides corporate advice. Joint chief executives Julian Biggins and Chris Wyke said most business segments were "performing strongly." They said real estate private credit, which represents around 15% of overall AUM and a significantly smaller share of earnings, had proved challenging, while asset-backed private credit, operating real estate such as pubs and marinas, and core real estate continued to perform strongly.
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