Australian Lender Suspends Three ASX Funds After Audit Review

Post by : Saif

Metrics Credit Partners, one of Australia’s major private credit lenders, suspended trading in three ASX-listed funds on Monday and reduced their reported asset values after auditors reached different conclusions about assumptions used in preliminary financial reports.

The lender, which manages around A$40 billion ($28.09 billion), halted trading in the Metrics Real Estate Multi-Strategy Fund, Metrics Income Opportunities Trust and Metrics Master Income Trust before the Australian market opened.

Three Funds Face Asset Value Cuts

The audit process resulted in significant changes to the net tangible asset values of all three funds.

Metrics said the net tangible asset value of the Real Estate Multi-Strategy Fund was reduced by 12.16%. The Income Opportunities Trust was marked down by 10.08%, while the Master Income Trust saw a smaller reduction of 1.99%.

The changes followed an audit by KPMG, which made what Metrics described as “different decisions” regarding inputs and probability weightings compared with those used in the preliminary financial reports.

Real Estate Fund Takes Biggest Reduction

The Metrics Real Estate Multi-Strategy Fund recorded the largest adjustment.

Its net tangible asset value was reduced to A$2.22 per unit from A$2.53, a 12.16% decline. The fund’s last traded price was A$1.68.

Metrics said most of the reduction came from lower fair-value estimates for unlisted commercial real estate equity investments.

The company also said the audit process placed greater weight on downside scenarios and less favourable possible outcomes when assessing the value of assets.

Read more: Australian Senate Suspends Pauline Hanson After Burqa Protest Sparks Outrage

Higher Provisions for Potential Loan Losses

The audit also resulted in higher provisions for potential losses linked to loan exposures across the three listed funds.

Metrics said the adjustments reflected factors including interest rates, broader economic conditions and increased regulatory expectations applied to specific assets and the overall portfolios.

The changes highlight how different assumptions about asset values and potential risks can have a significant effect on private credit and investment funds.

Private Credit Sector Faces Greater Scrutiny

The announcement comes as Australia’s private credit industry faces increased regulatory and market attention.

The sector has come under scrutiny following the collapse of property developer Bathla, which entered administration with about A$3 billion owed to around 40 lenders. Metrics said it has no exposure to Bathla.

Australia’s corporate regulator also recently warned private credit firms about what it described as unrealistic valuations and weak governance practices. The regulator said companies that failed to meet required standards could face enforcement action.

Metrics Reviews Fund Valuations

Metrics said the updated valuations were part of the process of finalising audited financial results.

The company said the review considered more downside scenarios and potential unfavourable outcomes. Higher provisions were also applied to possible loan losses across the three funds.

Trading in the three ASX-listed funds was suspended while the revised valuations and audited results were addressed.

The changes are likely to keep attention focused on asset valuations, risk assessments and governance standards across Australia’s growing private credit market.

#trending #latest#MetricsCreditPartners #AustralianMarkets #ASX #PrivateCredit #AustraliaFinance #InvestmentFunds #FinancialMarkets #KPMG #AssetValues #AUSFinance #BusinessNews #MarketNews