Metrics freezes redemptions as Australian private credit pressures mount

Australian private credit manager Metrics Credit Partners has temporarily suspended redemptions from a number of underlying unlisted funds, according to a report by Reuters, adding to signs of strain across the country’s fast-growing non-bank lending market. The move comes after auditor KPMG declined to sign off on the full-year accounts of three listed Metrics vehicles.

The affected listed vehicles: Metrics Real Estate Multi-Strategy Fund, Metrics Income Opportunities Trust and Metrics Master Income Trust, have been suspended from trading since Monday after Metrics announced write-downs to their asset values.

Metrics reportedly said redemptions from unlisted funds underlying the listed vehicles had also been temporarily suspended, while trading in the listed funds would remain halted until audited financial statements are lodged.

The developments come amid increased scrutiny of Australia’s private credit sector following the collapse of property developer Bathla Group, which entered administration in August owing around AUD3bn to approximately 40 lenders, many of them private credit firms.

Metrics said earlier this week that it had no exposure to Bathla.

Australia’s private credit market has expanded rapidly in recent years, with significant lending exposure to real estate. That has left parts of the market facing pressure from higher interest rates, weaker property conditions and growing investor concerns around asset valuations and liquidity.

The Australian Securities and Investments Commission said it was closely monitoring developments across the sector, warning that managers restricting or deferring redemptions must ensure investors are treated fairly.

The regulator last week also raised concerns over valuation practices and governance standards in private credit, warning that firms failing to meet its expectations could face enforcement action.

Separately, Perpetual, the responsible entity for Metrics Master Income Trust and Metrics Income Opportunities Trust, has suspended distribution reinvestment plans for both vehicles, meaning investors will temporarily be unable to use distributions to purchase additional units.

S&P Global has meanwhile placed four Metrics wholesale funds on credit watch as it assesses the implications of the developments across the manager’s portfolio.