Key facts
- Metrics Credit Partners suspended trading in three ASX-listed funds on Monday.
- Auditor KPMG disagreed with assumptions used in preliminary financial reports.
- Net tangible asset values were cut by 12.16% for the Metrics Real Estate Multi-Strategy Fund.
- Net tangible asset values were cut by 10.08% for the Metrics Income Opportunities Trust.
- Net tangible asset values were cut by 1.99% for the Metrics Master Income Trust.
- Metrics stated it has no exposure to property developer Bathla, which owes A$3 billion.
Metrics Credit Partners, one of Australia's largest private credit lenders managing approximately A$40 billion, suspended trading in three of its ASX-listed funds on Monday. The decision followed disagreements with auditor KPMG over assumptions used in preliminary financial reports, leading to significant reductions in asset values.
The Metrics Real Estate Multi-Strategy Fund saw its net tangible asset value cut by 12.16%, from A$2.53 to A$2.22 per unit, primarily due to a lower fair value assessment of unlisted commercial real estate equity investments. The Metrics Income Opportunities Trust experienced a 10.08% reduction, and the Metrics Master Income Trust a 1.99% reduction.
Metrics stated that in finalizing audited results, greater weight was given to downside scenarios and less favorable potential outcomes. The audit process also resulted in higher provisions for potential loan losses across the three funds, reflecting interest-rate and macroeconomic conditions, as well as heightened regulatory expectations.
This action occurs amid increased scrutiny of Australia's private credit sector, following the collapse of property developer Bathla, which owed A$3 billion to around 40 lenders. Metrics confirmed it has no exposure to Bathla. Australia's corporate regulator has recently warned about unrealistic valuations and poor governance practices in the industry.