The Australian Securities and Investments Commission (ASIC) has published findings from its second major private credit review, identifying persistent weaknesses in fees, disclosure, distribution and conflict management. The surveillance covered 24 wholesale and retail funds managing AUD 18 billion between November 2025 and August 2026, alongside a sample of advice to retail investors. Many shortcomings identified in ASIC’s November 2025 report remain despite subsequent guidance, including its ten principles for private credit.
Complex structures and arrangements involving related entities obscured fees and conflicts, with some transactions not fully disclosed to investors. Fee disclosures were incomplete or inconsistent, including about amounts retained by managers, and only two of 22 funds passed the full economic benefits of interest and borrower fees to investors. Nine of 12 retail funds failed to clearly disclose information needed for investment decisions, including details of underlying assets, structures or risks. Most financial advice reviewed met legal obligations, but 88% of files recommending portfolio allocations above 20% to private credit funds failed to demonstrate compliance with the best interests duty.
The surveillance has resulted in six interim stop orders since September 2026 and multiple referrals for further enforcement investigation. The orders were lifted after the identified issues were addressed. Poor private credit practices remain a 2026 enforcement priority, with several investigations already well advanced. ASIC also plans to refresh managed fund guidance to address funds with private credit strategies and engage industry bodies on stronger standards across retail and wholesale funds.