SYDNEY, Sept 30 (Reuters) – Metrics Credit Partners, one of Australia’s biggest private credit firms, said it had frozen investor redemptions from some funds and delayed the release of financial reports, in the latest sign of stress in the non-bank lending sector.
Metrics, which manages around A$40 billion ($28 billion), said on Wednesday that its auditor KPMG would not sign off on full-year accounts for three listed funds before a September 30 lodgement deadline.
The three funds — the Metrics Real Estate Multi-Strategy Fund, Metrics Income Opportunities Trust and Metrics Master Income Trust — have been suspended from trading on the stock exchange since Monday after Metrics disclosed it had written down their asset values.
Redemptions of units in unlisted underlying funds that feed into the listed vehicles “have now been suspended temporarily”, Metrics said.
The listed funds will remain suspended from trade until audited financial reports are submitted, it added.
Metrics said KPMG disagreed with assumptions used in their preliminary financial reports, including how fair value was calculated for unlisted commercial real estate equity investments.
Australia’s corporate regulator warned last week of unrealistic valuations and poor governance practices in the private credit industry, and said firms that failed to meet its standards should prepare for enforcement action.
The warning followed the collapse of property developer Bathla Group, which owed A$3 billion to some 40 lenders when it entered administration in August.
Australia’s private credit market has expanded rapidly and is heavily exposed to the property market, which is in a downturn due to interest rate hikes and housing tax changes.
($1 = 1.4349 Australian dollars)
(Reporting by Anjali Singh in Bengaluru and Christine Chen in Sydney; Editing by Edwina Gibbs)
