Corporate regulator warns private credit investors still lack key risk information

Australia's corporate regulator has criticised persistent weaknesses in private credit, saying investors are still not receiving enough information about risks, fees and conflicts. The sector provides lending outside banks and has become a major source of finance for property development and construction.

ASIC's second major surveillance review examined 24 wholesale and retail funds with about $18 billion under management between November 2025 and August 2026. That sample is distinct from estimates putting the wider sector at about $250 billion.

The regulator said complex structures, limited transparency and deficient disclosure remained concerns despite its earlier warnings. Its interventions have included six interim stop orders and referrals for further enforcement investigation. Those steps should not be confused with final findings against every fund in the sector.

Restrictions on investors withdrawing money from some private lenders have added to concern about liquidity. Private credit investments can involve risks that are harder for investors to assess than ordinary bank products, particularly where information on underlying loans and financial positions is limited.

Industry organisations have released guidance intended to improve governance, lending standards and investor protection. They acknowledge weaknesses in parts of the market while arguing private credit supports businesses. The regulator's message is that guidance alone does not replace clear disclosure and compliance.