Private markets in Australia are hiding potentially large risks to a growing number of investors amid their rapid expansion, making them a key policy focus for the nation’s securities regulator.
The Australian Securities and Investments Commission made private markets and emerging financial products one of its top five strategic priorities, according to its 2024 corporate plan released Aug. 22. ASIC said its progress to increase scrutiny of the financial industry and credit providers is stymied by limits to its power to collect detailed recurring data.
“While Australia’s private markets are dwarfed in size by our listed equity markets, their opacity presents an outsized risk to market integrity, particularly as more investors become exposed,” ASIC Chair Joe Longo said in a statement. “The addition of a new strategic priority aimed at driving consistency and transparency across markets and products puts all market participants on notice.”
Australian pension funds now hold nearly one fifth of their A$3.9 trillion ($2.6 trillion) in private assets domestically and offshore after growth in recent years. The extra scrutiny underscores the expansion of areas such as private credit, private equity and venture capital assets where investments tend to be valued less frequently than in public markets.
