Australian regulator tells private credit sector it must refresh asset valuations

SYDNEY - Australia's corporate regulator said the country's A$200 billion ($141.14 billion) private credit market must ensure asset valuations accurately reflect global economic upheaval as they finalise accounts for June 30, the end of the financial year.

• The Australian Securities and Investments Commission, or ASIC, carried out a survey of 22 private credit managers from March until May

• The managers had oversight of 52 funds with a combined A$76 billion in assets

• The survey found pockets of higher defaults, impairments and loan amendments

• It said the current global economic upheaval presented the first real test faced by Australia's private credit sector

• The sector is in its infancy compared to overseas markets, especially the U.S.

• The survey found new funds were being established more slowly

• It found some "concentration risk" as property, development and construction emerged as a common asset held by the Australian funds

• "If valuations do not reflect current conditions and incorporate verified accurate information, there is a higher risk of misinformation and poor investor outcomes," ASIC said

($1 = 1.4170 Australian dollars)

(Reporting by Scott Murdoch; editing by Barbara Lewis)

Copyright Reuters or USA Today Network via Reuters Connect.