ASIC halts Angas Securities from selling interests in two funds

What happened

Australia's corporate regulator put temporary stop orders in place that bar Angas Securities Ltd. from any offer, issue, sale or transfer of interests in two of its managed schemes - the Angas Prime Income Fund and the Angas Direct Mortgage Fund. The Adelaide firm was named in a Monday statement.

ASIC also said Angas Securities had about A$114 million in investor funds on its books at the end of June.

Why ASIC moved

The regulator said it is concerned investors in both funds might not have been properly briefed on Angas Securities' financial position and the risks tied to it. Private credit is already under close review, and an update on ASIC's private credit surveillance is expected on Nov. 10.

"Our message to private credit fund managers is crystal clear," said Simone Constant, ASIC commissioner. "Investors need clear and timely information about the risks they are taking on, particularly when circumstances change and private credit loans run into difficulty."

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"ASIC will continue its broader scrutiny of private credit and will continue to step up our actions," she said. "We will act swiftly where we are concerned investors are not being given the full picture about the risks they face."

What this means for your portfolio

In August, the Sydney developer Bathla entered insolvency, with debts of about A$3.4 billion, largely to private credit funds. With Angas' stop orders in place and disclosure questions raised, investors in either fund should track ASIC's actions and the Nov. 10 surveillance update closely.

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