MA Financial has suspended redemptions on AS$2.3bn (€1.4bn) of property-related funds and will wind up its MA Secured Real Estate Income Fund amid deteriorating conditions across Australian real estate and private credit markets.
The ASX-listed financial group becomes the latest private credit provider to halt withdrawals following the collapse of Western Sydney residential developer Bathla Group, which owes more than A$3.4bn to around 40 private lenders.
MA Financial said private credit outflows remained elevated as headwinds arising from the current challenges in the residential real estate market conditions were extending time frames for some asset sales and maturing loan refinancing.
“Reflecting market conditions, the MA Secured Loan Series real estate credit fund restricted redemptions to 1% of fund AUM in August. The decision has now been made to temporarily suspend all applications and redemptions to this fund,” it said.
MA Financial, which manages A$7.5bn in private credit assets, said the A$100m retail fund offering would be wound up.
“This is a prudent measure to assist the orderly management of the fund in the coming months in the face of less certain repayment timing from some borrower.” But it added income distributions to investors were expected to continue to be paid monthly.
MA Financial joint CEOs Julian Biggs and Chris Wyke said: “Our operations in real estate private credit have recently proved challenging, impacted by the macro environment in residential construction and development in Australia.
“This segment of our business represents around 15% of our overall AUM, and significantly less as a percentage of our total earnings,” they said, adding, however, most of the group’s divisions were “performing strongly”.
Australia’s largest credit manager, Metrics Credit Partners, suspended redemptions on its wholesale underlying funds while working through a valuation dispute with auditor KPMG.
Meanwhile, local private lenders CSV Lane and Centuria Bass have both halted withdrawals on their funds following exposure to the collapsed property developer Bathla Group.
To read the latest IPE Real Assets magazine click here.
