What happened
ASIC Commissioner Simone Constant publicly criticized superannuation chief investment officers for failing to properly vet external private credit managers. Speaking in Sydney, Constant warned that enforcement action is approaching for the private credit sector following the $3.4 billion collapse of property developer Bathla Group, which owed extensive funds to non-bank lenders.
Why it matters here
Australian super funds have increasingly allocated capital to high-yielding private credit as a substitute for traditional fixed income. ASIC’s warning underscores valuation risks and potential governance lapses. Rigorous look-through due diligence will be required to ensure fund managers fulfill their legal obligation to act in members' best financial interests.
What to watch
Formal enforcement steps by ASIC targeting private credit valuation standards, alongside quarterly super fund disclosures regarding unlisted asset allocations and non-bank lending exposures.
Source
investmentmagazine.com.au