Australian private credit funds are working to contain investor panic following the collapse of property developer Bathla Group, which has raised concerns about the industry's heavy exposure to the property sector. The failure of Bathla, a developer with projects including a site in Sydney's Marsden Park suburb, has sparked fears that more builders could face insolvency as the sector contends with falling home prices and rising construction costs. The situation has been described as the industry's "First Real Test" by market observers.

The fallout has been significant enough that even a private credit fund with no direct exposure to Bathla Group has imposed new limits on investor redemptions, signaling broader nervousness across the market. Fund managers are now scrambling to reassure investors and assess the extent of potential contagion throughout the property development pipeline.