Why ASIC’s moves to lift private credit standards aligns with our values

As lenders and investors increasingly turn to private credit, regulatory attention on the market is timely. ASIC’s recent measures to raise industry standards strengthen investor protection and reinforce the fixed‑income traits we prize in client portfolios, namely capital preservation, predictable income and disciplined risk management.

Improved disclosure and transparency:

ASIC’s focus on clearer reporting of borrower quality, covenants, pricing and fees reduces surprises. For fixed‑income investors, transparent cash‑flow and credit information are essential to assess income predictability and downside risk.

Stronger governance and conflict‑of‑interest controls:

Better governance and independent oversight align managers’ incentives with investors. That reduces the chance of aggressive lending and supports steadier outcomes which is crucial where preserving principal and consistent income matter.

Realistic valuation and liquidity frameworks:

Guidance on fair valuation and liquidity management encourages conservative pricing and contingency planning. When valuations reflect true stress scenarios, income streams are less likely to be disrupted by forced sales or sudden markdowns.

Enhanced risk management and stress testing:

Requiring formal stress tests and risk frameworks ensures portfolios are built with downside scenarios in mind. This makes private credit behave more like a disciplined income instrument rather than an equity‑style gamble.

Better suitability and distribution practices:

Ensuring products are sold to the right clients prevents mismatches between product complexity and investor needs. Appropriately sized private credit allocations complement a fixed‑income sleeve rather than undermining it.

What this means for you

ASIC’s uplift makes private credit a more secure and predictable component for income‑focused portfolios. While private credit differs from government and high‑grade corporate bonds, higher regulatory standards narrow that gap, thereby helping deliver steadier income and greater capital protection. We will continue to favour managers with strong governance, transparent reporting and conservative valuation practices so our clients benefit from reliable, well‑managed fixed‑income exposure.