Key facts
- Metrics Credit Partners has frozen investor redemptions from some funds.
- Metrics Credit Partners delayed the release of financial reports for three listed funds.
- KPMG disagreed with assumptions used in preliminary financial reports regarding fair value of unlisted commercial real estate equity investments.
- The three affected Metrics funds have been suspended from trading since Monday.
- Australia's corporate regulator warned last week of unrealistic valuations and poor governance in the private credit industry.
Metrics Credit Partners, one of Australia's largest private credit firms, has frozen investor redemptions from some of its funds and delayed the release of its full-year financial reports. The firm manages approximately A$40 billion in assets. The auditor, KPMG, has indicated it will not sign off on the accounts for three listed funds—the Metrics Real Estate Multi-Strategy Fund, Metrics Income Opportunities Trust, and Metrics Master Income Trust—before the September 30 deadline due to disagreements over the valuation of unlisted commercial real estate equity investments.
Consequently, these three listed funds have been suspended from trading on the stock exchange since Monday. Metrics stated that redemptions from the unlisted underlying funds feeding into these listed vehicles have also been temporarily suspended. The listed funds will remain suspended until audited financial reports are submitted.
This situation highlights broader stress in Australia's non-bank lending sector, which has expanded rapidly and is heavily exposed to the property market. The property sector is currently facing a downturn influenced by interest rate hikes and changes to housing taxes. Last week, Australia's corporate regulator issued a warning about unrealistic valuations and poor governance practices within the private credit industry, indicating potential enforcement actions for firms not meeting standards. This warning followed the collapse of property developer Bathla Group, which owed A$3 billion to approximately 40 lenders before entering administration in August.