Metrics Halts Redemptions in Some Funds Amid Auditor Dispute on Valuations

Metrics Credit Partners, a major Australian private credit firm managing approximately A$40 billion ($28 billion), has suspended investor redemptions from some of its funds and delayed financial reporting. The move, which points to growing stress in the non-bank lending sector, follows a disagreement with its auditor over asset valuations.

Audit Dispute Halts Trading

Metrics announced on Wednesday that its auditor, KPMG, would not sign off on the full-year accounts for three of its listed funds before the September 30 deadline. The firm cited a disagreement over the assumptions used to calculate the fair value of unlisted commercial real estate equity investments held by the funds.

As a result of the dispute and a prior writedown of asset values, the following three funds have been suspended from trading on the stock exchange since Monday:

• Metrics Real Estate Multi-Strategy Fund
• Metrics Income Opportunities Trust
• Metrics Master Income Trust

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Metrics also confirmed that redemptions from the unlisted underlying funds that feed into these listed vehicles have been "suspended temporarily." The trading suspension will remain until audited financial reports are submitted.

Scrutiny on Private Credit Sector

The actions at Metrics amplify concerns about Australia's rapidly expanding private credit market, which has significant exposure to a property sector facing headwinds from higher interest rates and tax changes.

The development comes just a week after Australia’s corporate regulator issued a warning about unrealistic valuations and poor governance practices within the industry. The regulator cautioned that firms failing to meet its standards should prepare for potential enforcement action. This followed the August collapse of property developer Bathla Group, which owed A$3 billion to approximately 40 lenders, highlighting the sector's potential vulnerabilities.