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ASIC to examine investment in private credit by super funds
The Corporate watchdog is interested in exploring how super funds are investing in private credit as part of its comprehensive review of the rapidly expanding market.
Speaking at King & Wood Mallesons’ Digital Future Summit 2025, ASIC chair Joe Longo said ASIC will release a progress report on private credit this September which will highlight some concerning practices and invite feedback from industry participants on how standards can be improved.
“There’s a lot of interest in private credit right now,” Longo said. “We’ll call out some practices we think are unattractive. We'll also be looking to market participants to suggest ways of better practices and standards.”
When asked whether the September update would include guidance on superannuation, Longo said the sector was “a vast subject” but said the regulator is particularly interested in how superannuation money is being used to invest in the private credit market.
“We are very focused as a regulator on ensuring that members get looked after in superannuation funds,” he said. “As far as the private public markets work is concerned, we want to understand where this money is going and the impact on our capital markets. So for example, between a third and a quarter of ASX is superannuation money. That wasn't always the case.”
Longo noted that some major funds now have up to 25 per cent, and growing, of their portfolios in private markets.
“There's a public interest I would suggest in knowing what's going on there. So ordinary Australians’ money going to the superannuation funds, and there's some very clever professional people on the investment committees investing those funds. And I think it's good public policy that everybody understands where the money is going, and how it's being invested, and what the returns are,” the chair said.
“It's not just a private interest at stake here. There is a public interest at stake here, and I'm constantly reminding people that that's what matters in the end, that's a private interest.”
Speaking about its review more broadly, ASIC said that it intends to identify best practices based on insights from its surveillance activities and input from the industry, focusing on areas like valuations, fee disclosures and liquidity.
“You don’t need us to impose what they [standards] are,” Longo said. “Our job is to encourage high standards in this sector, in these practices, but I don't want to be the one prescribing them, and I don't think Parliament wants to be doing that either.
“So a lot of this is driven by the market. And as the market’s regulator, I see a role for us to know what's going on and to encourage good practices. And where the practices are illegal or unattractive, then we will take enforcement action.”
The chair’s remarks follow ASIC’s capital markets discussion paper released in February, which sparked a period of consultations and announcements affecting both private and public markets.
Longo revealed that a more comprehensive report is expected in November, addressing issues raised in the discussion paper.
“I'm not sure where we go from there. I think that we will have some proposals that we will be consulting on,” he said.
“I'd be very surprised if ASIC stops its private public markets work after November,” Longo added, acknowledging that the exact next steps are still unclear.
“We'll have to wait and see where the resources of the Commission are best utilised to solve problems that we've identified or ideas that have been put to us.”
On the public markets front, he pointed to ongoing reforms under a two-year IPO pilot program, including efforts to streamline prospectuses and improve forecasting, measures designed to boost market participation.
He also referenced the government’s productivity push, noting that “various aspects of the Corporations Act could do with some reform”, which could ultimately benefit the use of public markets and corporate law more broadly.
“I think for the corporate lawyers among us, we all know that there are various aspects of the Corps Act that could do with some reform. And if the government goes down that path, then I think that would also have a beneficial impact on our use of public markets and corporate law generally, just the way in which we operate generally,” Longo said.
AUTHOR
Maja Garaca Djurdjevic
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