The Australian Securities & Investments Commission has flagged an ongoing investigation into Australia’s capital markets and whether its approach needs to adapt. The growth in private markets in wealth creation is a key driver.
ASIC said in its Key Issues Outlook 2025: “ASIC will be leading discussion on issues key to the ongoing and future success of Australia’s capital markets and seeking feedback on whether our regulatory settings and supervision approach needs to adapt in light of changing market dynamics.
“Domestic and international regulators and policy makers are taking steps to review and respond to issues arising from these changes and to consider potential vulnerabilities and harms that may emerge with growth in private markets.
“Both public and private markets are important to our economy and play a role in generating wealth. Through superannuation investments, many Australians have indirect exposure to private assets. Private markets operate differently than public markets and are inherently less transparent.
“We are also increasing our focus on private markets through our surveillance work: as part of this work ASIC will review the governance processes and practices of a sample of responsible entities of retail private credit funds, including their asset valuation and liquidity management practices.”
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ASIC chair Joe Longo has said it was important to consider issues of disclosure and valuations in private markets as these played a key role in retirement savings for many Australians.
Reach Alternative Investments head of investments Jonathan Ng said recently in The Australian the regulator could home in on disclosures of performance or valuations in private assets or private markets.
Many of these markets can often feature side-letters or deals not actively disclosed to investors.
Mr Ng was quoted as saying private lending in Australia was the “wild west”.
Mr Ng believes private credit was the most vulnerable area for ASIC intervention, given its rapid growth and profusion of players.
ASIC is preparing to publish a report into private markets and private assets next month.
Private market allocations are rapidly becoming a significant portion of advisors’ book of business, according to a recent survey of investment advisors conducted by global private markets investment management firm Hamilton Lane. Nearly one-third (30%) of survey respondents report they plan to allocate 20% or more to the asset class. Another 29% plan to allocate 10% or more, meaning that a total of nearly 60% of the financial professionals surveyed plan to allocate 10% or more to private market investments in 2025. This is a 15% increase from the firm’s 2024 survey and marks a notable shift in comfort with the asset class and growing interest among individual investors.
Scott Thomas, Hamilton Lane’s Head of Private Wealth in Australia said, “The strong interest in private markets among our Australian private wealth clients is directly aligned with the report’s findings, which underscore a global shift towards this asset class for diversification and long-term performance enhancement.”
