'Absolutely appropriate’: MA Financial backs private credit scrutiny
The popularity of private credit assets has caught the eye of regulators but MA Financial and Metrics Credit Partners say concerns are overblown.
Two of Australia's biggest private credit market participants have weighed in on the growing noise surrounding the booming asset class, with MA Financial welcoming additional scrutiny of the sector and Metrics Credit Partners warning against hysteria over the risks involved to investors.
Alternative assets such as private credit have skyrocketed in popularity since the Covid-19 pandemic, when equities and bonds fell in tandem in response to higher interest rates and the traditional 60/40 portfolio strategy fell to pieces.
But the increased popularity has caught the attention of global regulators amid concerns over a lack of transparency and use of excessive leverage. In Australia, both the Australian Prudential and Regulation Authority (APRA) and the Reserve Bank undertook reviews into private markets last year along with the corporate and market regulator ASIC. The results of ASIC review are set to be made public imminently.
Speaking with Capital Brief, listed private credit asset manager MA Financial’s joint chief executive Chris Wyke said increased scrutiny was necessary.
