Examining the Growth and Challenges in the Expanding Private Credit Sector
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Australia's private credit market has experienced significant growth, with assets under management reaching $224 billion-a 9% increase from the previous year.
This expansion comes even as the Australian Securities and Investments Commission (ASIC) raises concerns about valuation inconsistencies and liquidity practices within the sector.
According to Alvarez & Marsal's Australian Private Debt Market Review 2025, the private credit market's robust growth trajectory reflects a consistent shift in capital deployment strategies. Institutional investors, including pension funds and insurers, are increasingly allocating resources to private debt, attracted by its risk-return profile and the breadth of market opportunities.
However, ASIC's recent surveillance review of 28 private credit funds highlighted issues such as valuation inconsistencies and mixed liquidity practices. These findings underscore the need for enhanced regulatory oversight to ensure transparency and protect investors.
For borrowers, the expanding private credit market offers alternative financing options beyond traditional banking channels. While these alternatives can provide more flexible terms, it's essential for borrowers to conduct thorough due diligence and understand the associated risks.
As the private credit market continues to evolve, balancing growth with robust regulatory frameworks will be crucial to maintaining investor confidence and ensuring the sector's long-term sustainability.
Published:Wednesday, 21st Jan 2026 Source: Paige Estritori
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