Key Takeaways
- • ASIC has issued interim stop orders halting the offer, issue, sale, and transfer of interests in two Angas Securities funds: the Angas Prime Income Fund and the Angas Direct Mortgage Fund.
- • ASIC's concerns center on product disclosure statements that allegedly failed to adequately disclose Angas Securities' financial position and the Angas Prime Income Fund's exposure to the collapsed Bathla Group.
- • The action is part of a broader ASIC crackdown on private credit, following stop orders against funds managed by Murdoch Clarke Mortgage Management and Fidante Partners.
- • ASIC will decide whether to make the stop orders final after giving Angas Securities an opportunity to be heard.
- • ASIC is tracing the $3.2 billion loaned to Bathla Group, which entered voluntary administration in August, and is assessing the extent of retail investor exposure.
Summary
The Australian Securities and Investments Commission (ASIC) has halted sales of two private credit funds operated by Angas Securities, citing concerns that the product disclosure statements (PDS) for the funds did not adequately disclose the firm's financial position or, in the case of the Angas Prime Income Fund, its exposure to the Bathla Group. The interim stop orders prohibit Angas Securities from offering, issuing, selling, or transferring interests in the Angas Prime Income Fund and the Angas Direct Mortgage Fund.
ASIC commissioner Simone Constant said investors in both funds may not have been adequately informed about the firm's financial position and the risks arising from it. "Our message to private credit fund managers is crystal clear," Constant said. "Investors need clear and timely information about the risks they are taking on, particularly when circumstances change and private credit loans run into difficulty."
The action follows Bathla Group's collapse. The property developer entered voluntary administration in August, raising concerns that investors could pull back from private credit funds exposed to the sector. According to Constant, ASIC is working with voluntary administrators to trace the $3.2 billion in funds loaned to Bathla and is examining the extent to which retail investors are affected. "The collapse of the Bathla Group has highlighted the risks that can emerge in private credit when this message is ignored," she said, adding that the episode underscores the importance of strong governance, appropriate valuations and clear disclosure.
The Angas orders come amid a broader regulatory push. ASIC recently issued stop orders against funds managed by Murdoch Clarke Mortgage Management and Fidante Partners over inadequate disclosure. In late September, Constant said the regulator was "beyond warnings" and urged private credit managers to assess themselves against ASIC's 10 best practice principles, warning that firms failing to lift standards should prepare for enforcement action.
ASIC will consider whether to make the interim stop orders final after giving Angas Securities an opportunity to be heard. Constant said the regulator will continue its scrutiny of private credit and "will act swiftly where we are concerned investors are not being given the full picture about the risks they face."
ASIC commissioner Simone Constant said investors in both funds may not have been adequately informed about the firm's financial position and the risks arising from it. "Our message to private credit fund managers is crystal clear," Constant said. "Investors need clear and timely information about the risks they are taking on, particularly when circumstances change and private credit loans run into difficulty."
The action follows Bathla Group's collapse. The property developer entered voluntary administration in August, raising concerns that investors could pull back from private credit funds exposed to the sector. According to Constant, ASIC is working with voluntary administrators to trace the $3.2 billion in funds loaned to Bathla and is examining the extent to which retail investors are affected. "The collapse of the Bathla Group has highlighted the risks that can emerge in private credit when this message is ignored," she said, adding that the episode underscores the importance of strong governance, appropriate valuations and clear disclosure.
The Angas orders come amid a broader regulatory push. ASIC recently issued stop orders against funds managed by Murdoch Clarke Mortgage Management and Fidante Partners over inadequate disclosure. In late September, Constant said the regulator was "beyond warnings" and urged private credit managers to assess themselves against ASIC's 10 best practice principles, warning that firms failing to lift standards should prepare for enforcement action.
ASIC will consider whether to make the interim stop orders final after giving Angas Securities an opportunity to be heard. Constant said the regulator will continue its scrutiny of private credit and "will act swiftly where we are concerned investors are not being given the full picture about the risks they face."
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