ASIC to deep dive dimension of private markets

Mike Taylor

Managing Editor/Publisher, Financial Newswire

5 June 2025

The Australian Securities and Investments Commission (ASIC) has acknowledged in passing that may have underestimated the size of private markets in Australia.

After issuing a discussion paper on the dynamics between public and private markets in February, ASIC received 55 submission responses from market participants many of which argued that private markets had grown substantially in Australia, leading the regulator to flag that it will be seeking to “dimension” the market itself.

ASIC also acknowledged considerable feedback calling for increased supervision of the Australian private credit market due to its opacity, rapid growth and untested status in a downturn, noting the increasing exposure of retail investors.

Commenting on the feedback received from stakeholders, ASIC chair, Joe Longo said that the regulator had distilled the feedback into themes which would shape its further work and thinking, including learning from international experience.

He said those themes include:

• Structural and cyclical factors are shaping both public and private markets
• Public market adjustments would improve and enhance their attractiveness
• Private markets are here to stay and grow, there is an acknowledgement of the need for any regulatory guidance to be measured, working closely with industry and aligning to international standards
• Private credit is good for the economy and investors, if done well. There may be work to do to ensure it is sustainably done well
• Superannuation is a mature investment force in Australia and a significant and structural influence in markets and investment
• More to do on data collection and transparency of private markets including in dimensioning the market itself and learning from international practices.

Looking at the theme of private markets being here to stay, ASIC said feedback had acknowledged that private markets provide both investors and issuers with significant benefits which are not always accessible in public markets.

Stakeholders reinforced ASIC’s view that private markets play an important capital allocation function that needs to be complementary to public markets, thus supporting the attractiveness and efficiency of Australia’s economy.

Many respondents suggested private markets are largely meeting institutional investors’ needs and current laws are generally promoting good outcomes for these investors. While some cautioned against increased regulation of institutional participants in private markets, there were recommendations for additional supervision when it comes to valuation of assets, management of conflicts of interests, management of information, meaningful disclosure of fees and risks, and fair treatment of different investor types, as well as further information from ASIC on what good could look like.