By Phil Miall, Head of Private Debt Australia, QIC
After ASIC released its Private Credit Surveillance Report, it stirred a lot of talk. At QIC, our view is simple: clearer private credit standards will make the market stronger.
The headline risk isn’t that ASIC is looking at private credit; it’s what happens if the industry doesn’t lean into the findings. The review lands on a balanced truth. Private credit done well plays a valuable role in Australia’s economy, yet parts of the market must lift standards on conflicts, fees, valuations, liquid,ity and transparency. That’s not an indictment; it’s a blueprint to strengthen the market. And for those that have always led with discipline, it’s a chance to stand out.
A market worth A$200 billion was always going to experience growing pains, so this scrutiny is to be expected. Yet, the case for private credit is only getting stronger. With banks retreating from parts of corporate and retail and real estate lending, non-bank lenders provide the capacity and flexibility borrowers still need.
The concern, captured plainly in recent reporting, is that some funds may not have been giving investors a true picture of performance.
ASIC cites opaque fee capture and reporting; valuation independence, methodology transparency and timeliness; ambiguous default policies; and liquidity management.
As institutional lenders, we welcome this calibration. Better comparability is the surest way to lower information risk and widen the pool of durable capital.
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From QIC’s vantage point best practice in private credit rests on five pillars:
- Origination comes first: selectively backing reputable sponsors, with deep blue diligence, rigorous underwriting and internal credit ratings monitored throughout the life of each loan.
- Loan structuring matters just as much. This means negotiating covenants and governance protections that work in real portfolios, not just in term sheets or pitch books.
- Portfolio construction provides the guardrails: pre-trade compliance checks on sector and single-name limits, current season ratings, plus scenario modelling to test resilience.
- Independent risk oversight ensures every new position faces a second set of eyes at committee, with the return profile weighed against the risks.
- Valuation governance closes the loop: quarterly brackets or (ad hoc) marks reviewed by a valuation committee independent of the deal team, ideally with external expertise and no link to remuneration.
These aren’t marketing lines; they’re the habits that make outcomes repeatable, and they map directly to asset priorities.
What’s next? ASIC has flagged further surveillance in the private credit sector in the year to come.
As the sector embraces the same governance standards, Australian private credit will emerge sturdier, more transparent, and more investable.
