FSC and IC claim private credit high ground

The major investment management lobby groups have sought to draw the positives from the Australian Securities and Investments Commission’s (ASIC’s) latest tough critique of the private credit sector.

The Financial Services Council (FSC) led the way signalling that it is representing the “mature operators” in the industry who support ASIC’s call for greater transparency.

In doing so, FSC chief executive, Blake Briggs also held out the ability of his organisation to lead the sector in terms of transparency and governance.

“The FSC acknowledges ASIC’s consultative and constructive approach throughout this consultation process, and we welcome ASIC’s recognition of the role that industry-led standards can play,” Briggs said.

“The FSC will work with the experienced and industry leading operators in our membership, in consultation with ASIC, to develop consistent standards that enhance governance and disclosure practices in private credit and private markets more broadly.

“The FSC’s approach aims to build consumer trust and support the long-term growth and stability of Australia’s capital markets, ensuring private markets can continue to deliver strong outcomes for investors and the economy.

“Private capital fills a funding gap for innovative Australian start-ups, growing businesses and property and infrastructure projects. It also provides diversification, return and income opportunities for Australians through superannuation and retail investments,” Briggs said.

Investment Council chief executive, Navleen Prasad also praised the consultative approach taken by ASIC and, like the FSC’s Briggs noted that the ASIC report had noted that the institutional end of the business are already adhering to good practices.

She said the detail released by ASIC provided a much-needed next level of clarity about where ASIC sees a need for improvement.”

“Private capital is the source of crucial investment into start-ups and growth businesses. It drives innovation, employment and competition across the entire economy.”

“As with other international markets, private credit has grown substantially over the past several years. It’s timely to reflect on practices that are not in service of investors or the market as a whole, and to ensure there are clear guardrails that strike the balance between investor protection, market confidence and fostering growth,” Prasad said.