ASIC Finds Private Credit Funds Still Fall Short on Disclosure

The Australian Securities and Investments Commission (ASIC) says private credit funds continue to leave investors without clear information about risks, fees and conflicts, after reviewing 24 funds with a combined $18 billion in assets under management. The regulator’s second major surveillance, covering November 2025 to August 2026, also examined financial advice to retail investors and resulted in six interim stop orders and multiple referrals for further enforcement investigation. ASIC’s Report 846 found that complex fund structures and related-party arrangements could obscure costs and conflicts. Eighteen of the 24 funds used multiple layers of intermediary entities, including special purpose vehicles, while only two funds passed on the full economic benefits of interest and borrower fees to investors. In one case, a related-party lender’s undisclosed fees and interest exceeded four times the fund’s disclosed management costs; the related party received 38 cents for every dollar distributed to investors during the relevant year. Retail disclosure and distribution were also concerns. Nine of the 12 retail funds reviewed did not clearly explain information important to investment decisions, including details of underlying assets, structures or risks. ASIC considered target market determinations for 10 of the 12 poorly designed, and said marketing by three funds overemphasised returns, stability, liquidity or capital preservation. Among advice files recommending allocations above 20% to private credit funds, 88% failed to demonstrate compliance with the best interests duty. ASIC Commissioner Simone Constant said the findings showed that practices had not kept pace with the asset class’s growth and called for greater transparency and accountability. The interim stop orders involved Fidante Partners, Australian Secure Capital Fund, Melbourne Securities Corporation and Murdoch Clarke Mortgage Management; ASIC said the orders were lifted after the identified issues were promptly addressed. The regulator said poor private credit practices are a 2026 enforcement priority and plans further work, including refreshing managed-fund guidance and engaging with industry on stronger standards.