An open letter on ASIC’s private credit review in Australia

An open letter from Wayne Lasky, Executive Chairman & Founding Partner, MaxCap Group

 

Dear investors, partners and stakeholders,

I’m writing to share MaxCap’s perspective on ASIC’s Report 820, Private credit surveillance report: Retail and wholesale surveillance, released yesterday.

We believe ASIC’s findings will have a positive and lasting impact on the sector.

A sector with purpose

ASIC’s report reinforces something we’ve always believed: private credit, done well, has a vital role to play in the Australian economy. The sector mobilises long-term capital to fund businesses and projects that may not fit traditional bank criteria but represent sound credit opportunities. This financing supports economic growth, employment and innovation across Australia.

The report acknowledges this contribution while highlighting a variety of practices across key areas including governance and conflicts management, fee and income transparency, portfolio transparency and valuations, credit risk management practices, and terminology. We welcome this focus.

The report also outlines the sector as a whole has more work to do, with opportunities for improvement identified across the industry. We take these observations seriously and are committed to continuous improvement.

Strong alignment

We’re fully aligned with ASIC’s priorities. Not just in words, but through concrete actions – these areas are where we’ve been focusing our enterprise uplift program investment over the past few years – a program developed jointly by Brae and myself as co-founders, alongside our Board of Directors.

This wasn’t reactive. Our 15-year track record of managing institutional capital has consistently demanded the governance standards, transparency and investor alignment that ASIC is calling for across the broader sector. The significant investment in our enterprise uplift program reflects our commitment to continuous improvement.

What we’ve been building

Let me point to three specific examples that demonstrate our alignment with ASIC’s priorities:

Valuations

Last year, we established a Loan Valuation Committee (LVC), separate from our Investment Committee. This structural separation is fundamental – the people who originate loans should not be the same people who value them.

Our LVC meets monthly to review our watchlist loans, assess potential impairments, and determine whether their value should be re-evaluated. This process receives inputs from our Risk team, Portfolio Management team, and the business – but the LVC makes independent assessments about valuations, provisioning and appropriate actions.

As part of our commitment to continuous improvement, we’re now building an external assurance framework which, among other things, will focus on our loan valuation governance. It will provide independent validation of our processes and further strengthen what is already a robust, independent valuation governance structure.

Conflicts management

Over the past 12 months, we have reviewed our conflicts management framework, working with two top-tier law firms. This involved examining every aspect of how we identify, assess, avoid, manage and disclose conflicts. Following this review, we have strengthened our policy, as well as enhanced our governance protocols and independent oversight.

Portfolio transparency

We’ve materially improved the transparency and detail of our flagship debt vehicle the MaxCap Investment Trust’s (MIT) quarterly reporting. Our portfolio health metrics now provide investors with comprehensive visibility including:

• Credit concentrations by borrower and sector
• Watchlist and non-performing loan disclosures
• Key milestone tracking
• Loan-to-value ratios
• Redemption metrics allowing investors to monitor timelines
  

This level of reporting reflects our commitment to transparency, which we will continue to review and enhance in line with ASIC’s findings and recommendations.

Industry-wide approach on fees

We agree with ASIC’s position on fees and believe this requires an industry-wide approach for consistency, rather than bespoke fund-by-fund responses. Fee structures across the Australian private credit market vary significantly. Some of this variation reflects genuine differences in strategy, asset class and investor base. But ASIC has identified opacity and misalignment as real problems that need addressing.

We support ASIC’s work to establish consistent disclosure standards that allow investors to compare total manager remuneration across funds. This benefits everyone – it helps investors make informed decisions and creates competitive pressure for managers to demonstrate value for fees charged.

We are reviewing our disclosures to ensure investors have the information needed to make fully informed investment decisions.

Looking forward

As one of Australia’s pre-eminent private credit managers, we were part of ASIC’s surveillance process and have been engaging constructively with the regulator throughout this review. We’re committed to continuing this engagement and our ongoing focus on continuous improvement.

The regulatory environment is evolving – not just in Australia, but globally. Markets in the EU, UK, Canada and Singapore are all moving toward higher standards for private credit. This global alignment is positive. It means Australian private credit will compete internationally with comparable standards, and institutional investors globally will view Australian managers through a consistent lens.

We view this evolution as an opportunity, not a burden. Higher standards create competitive separation, favouring managers with:

• Institutional pedigree and long track records
• Global partnerships bringing international best practices
• Robust governance infrastructure built through experience
• Transparent reporting that goes beyond minimum requirements
• Commitment to continuous improvement, not just compliance

These are all areas where we believe MaxCap is well-positioned to respond to the evolving regulatory environment.

Our commitment

Managing other people’s money is an immense responsibility. Our investors – whether institutional clients, private investors or those accessing our funds through wealth platforms – deserve transparency, discipline and alignment of interests.

The work we’ve done over nearly two decades demonstrates our commitment to these principles. The strong alignment between MaxCap and ASIC on where the industry needs to go gives us confidence that we’re building for the long term.

While ASIC’s report makes it clear that all participants have further work to do, we believe our proactive investment in governance, transparency and risk management provides a strong foundation. Having managed institutional capital for 15 years – capital that demands the highest standards of accountability – we are committed to not only meeting but striving to exceed the standards ASIC expects.

Importantly, we’re not just managing capital – we’re helping to better an industry that plays a vital role in Australia’s financing ecosystem. Done with discipline, transparency and proper governance, private credit can help to deliver reliable income and capital preservation for investors while supporting economic growth.

That’s the standard we strive to meet. That’s the future we’re committed to building.

We welcome your feedback. Our team is available to discuss any aspect of our approach, our alignment with ASIC’s priorities or how we’re positioned for the regulatory environment ahead.

Thank you for your continued trust and partnership.

Wayne Lasky
Executive Chairman & Founding Partner
MaxCap Group

 

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About MaxCap Group

MaxCap Group is a commercial real estate funds manager specialising in private credit and equity solutions across Australasia. Founded nearly two decades ago, MaxCap Group manages around $7 billion on behalf of pension and sovereign funds, insurers, wealth managers and private investors (as at 30 September 2025). Our strategic partnership with Apollo Global Management, established in 2021, combined MaxCap Group’s local origination and underwriting capabilities with Apollo’s global platform and expertise.