Australia's securities regulator has stopped Angas Securities Ltd. from selling two managed investment schemes, the latest in a series of actions aimed at preventing private credit funds from offering products that do not adequately highlight potential risks.
The interim stop orders from the Australian Securities and Investments Commission (ASIC) prevent the Adelaide-based firm from offering, issuing, selling, or transferring interests in the Angas Prime Income Fund and the Angas Direct Mortgage Fund, according to a statement on Monday. ASIC is concerned that investors in both funds may not have been adequately informed about the financial position of Angas Securities and the risks arising from it. That includes worries about disclosures to investors in the Angas Prime Income Fund relating to its exposure to the collapsed Bathla Group.
Australia's private debt market has been under scrutiny in recent months, and ASIC is expected to publish an update of its private credit surveillance on Nov. 10. Sydney property developer Bathla fell into insolvency in August, owing around A$3.4 billion ($2.3 billion), mostly to private credit funds.
"Our message to private credit fund managers is crystal clear," said Simone Constant, ASIC commissioner. "Investors need clear and timely information about the risks they are taking on, particularly when circumstances change and private credit loans run into difficulty." Angas Securities held about A$114 million in investor funds at the end of June, ASIC said. "ASIC will continue its broader scrutiny of private credit and will continue to step up our actions," she said.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing