ASIC’s Longo flags greater enforcement activity for private credit funds

Private markets funds with “unattractive practices” could find themselves facing enforcement activity with ASIC chair Joe Longo stating he cannot rule it out in the future.

Earlier this week, the regulator released the results of its private credit surveillance which surveyed 28 funds between October 2024-August 2025 on their fund disclosures, marketing, income transparency, governance and valuations.  

REP 280 Private Credit Surveillance surveyed 28 private credit funds between October 2024 to August 2025 including listed, unlisted, retail and wholesale funds. This spanned Australian managers such as Metrics Credit Partners and La Trobe Financial, global firms like KKR and smaller managers such as RELI Capital.

With poor practices identified by the regulator, Longo discussed what could happen if those funds failed to improve their operations.

Examples of poor practice observed included:

• Inconsistent and unclear reporting and terms, masking portfolio risks and challenging investor decisions;
• Opaque interest margins and fee structures, obscuring the risk and cost to investors;
• Weak governance and poorly managed conflicts of interest, risking harm to investors and confidence;
• Poor valuation practices, impacting entry and exit prices, performance and fees;
• Inadequate practices in key risk areas, indicating poor preparedness for stress scenarios.

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Answering a question from The Australian at the National Press Club, Longo said: “In terms of enforcement, I don’t rule out that for some of these entities, perhaps not arising out of this particular surveillance, but I don’t rule it out, but there will be more additional surveillance work done.  

“Some of the activity or practices we’re seeing are rather unattractive and are close to being illegal. So if we’re satisfied of that, you can expect us to take action. Because I really want the sector to get the message that lift your game, or you’re going to be hearing from us more and more.

“The question of illegality and whether the conduct rises to a point where we’re prepared to formally investigate it, and use our formal powers and take a case to the Federal Court or Supreme Court, that’s another matter.

“So we run about 200 investigations a year. So for serious misconduct, you can expect us to be there. Otherwise, you can expect us to have intense surveillance, more stop orders. We have an extensive toolkit, and we’ll use it.”

ASIC has already imposed interim stop orders on four private credit funds from La Trobe Financial, RELI Capital and TruePillars Investment Trust although some have been lifted since.

While some firms are demonstrating poor practice, Longo acknowledged ASIC had noticed firms are already improving in their standards and practices in the course of its surveillance and individual funds will receive letters giving specific feedback on their practice.

“So that in and of itself is in the public interest, that having conducted that surveillance, that was a nice result, because that’s the whole point. We’re trying to lift standards, and we’re trying to encourage people to say, well, this is good practice, this is bad practice.”