Metrics Credit Partners governance review: The audit dispute deepens

The focus shifts from valuation adjustments to governance, investor remediation and liquidity across Australia's private credit market.

8 October 2026

The Metrics Credit Partners governance review marks a new phase in the Australian private credit manager's audit dispute. The issue is no longer confined to asset valuations. It now extends to governance controls, investor treatment and the conditions under which capital can be accessed.

Metrics' three ASX-listed vehicles have resumed trading following the filing of audited accounts. More than two dozen unlisted funds reportedly remain closed to applications and redemptions while KPMG completes its work. The distinction is material: listed investors have regained market-based price discovery, while unlisted investors remain dependent on manager-reported valuations and fund-level liquidity arrangements.

What changed in the Metrics Credit Partners audit dispute

According to The Australian, Metrics chief executive Andrew Lockhart told investors on 7 October that the firm would commission an independent governance review and consider potential remediation once the outstanding unlisted-fund audits are completed. The review is expected to examine fees and internal transactions. No firm reopening date was provided, although Lockhart expressed hope that the audits would be completed before the 31 October deadline.

KPMG issued an unqualified audit opinion on the Metrics Master Income Trust's annual accounts. The responsible entity nevertheless indicated that it and Metrics would continue assessing the audit findings and whether further action was required. The distinction matters: an unqualified opinion on financial statements does not resolve every question concerning valuation controls, investor treatment or fund liquidity.

The governance review and potential remediation remain reported developments. Their final scope, findings and financial consequences have not been established.

Why the governance review matters for private credit

The central question is whether investors subscribed, redeemed or paid fees using valuations and processes that can withstand independent scrutiny. If the review identifies errors in unit pricing, fee calculations or internal transactions, remediation could involve financial adjustments and raise broader questions about the treatment of different investor groups.

Private credit valuations are particularly sensitive to governance because underlying loans rarely trade in transparent secondary markets. Investors rely on managers to assess borrower performance, collateral values and expected recoveries. Independent oversight is therefore essential to the credibility of reported net asset values.

The Metrics case illustrates how a valuation dispute can become a governance event. The immediate accounting outcome matters, but the integrity of the process used to determine valuations may have longer-lasting consequences for investor confidence.

Fund redemptions remain the liquidity test

The divide between listed and unlisted vehicles is now central to the investment implications. The listed funds have resumed trading, allowing investors to transact at market prices that may differ from reported net asset values. Investors in the affected unlisted funds reportedly remain unable to submit applications or redeem capital while the outstanding audits continue.

These restrictions do not, by themselves, establish losses in the underlying loan portfolios. They do, however, expose the limits of liquidity arrangements built around assets that cannot be readily sold. Even where borrowers continue servicing their loans, uncertainty over valuations or audit completion can restrict investor access to capital.

Prolonged restrictions may also affect the broader lending market. Managers seeking to preserve liquidity could reduce new originations, potentially increasing refinancing pressure on Australian property and corporate borrowers. Competing private lenders and special-situations investors may benefit, provided the underlying collateral and repayment prospects support the risk.

Confirmed facts and outstanding questions

Audited accounts have been filed for Metrics' listed vehicles, trading has resumed, and KPMG's opinion on the Metrics Master Income Trust accounts was unqualified. The responsible entity has also acknowledged that further steps may need to be considered.

Separately, The Australian reports that Metrics intends to conduct an independent governance review, assess possible investor remediation and maintain restrictions on its unlisted funds pending completion of the audits. The identity and mandate of the reviewer, any remediation methodology, updated valuations and reopening conditions remain unresolved.

These distinctions are important. A reported review is not evidence of misconduct, and possible remediation should not be treated as an established liability before the relevant findings are available.

Risks and opportunities in Australian private credit

The principal risks are extended redemption restrictions, further NAV adjustments, potential fee recalculations and uncertainty over whether investors transacted at appropriate prices. A prolonged process could also weaken confidence in manager-led valuations and increase scrutiny of conflicts of interest across private credit funds.

For investors, the response should be selective rather than indiscriminate. Managers able to demonstrate independent valuations, transparent fee structures, effective conflict controls and redemption terms aligned with underlying loan duration may attract greater confidence.

Refinancing and secondary-market opportunities could emerge if affected lenders reduce activity. However, higher yields alone do not justify exposure. Collateral quality, creditor priority, enforceable covenants and independent valuation remain decisive.

What Manhattan is watching

The next milestones are completion of the unlisted-fund audits, disclosure of the independent review's scope and any proposed investor remediation. Updated NAVs, fee adjustments, responsible-entity decisions and the terms governing resumed applications and redemptions will determine whether the process restores confidence.

Manhattan will also monitor potential ASIC findings and any wider regulatory response concerning valuation standards, conflicts of interest and liquidity management. The broader market implication will depend on whether this remains a firm-specific governance issue or prompts more extensive changes to private credit oversight.

Manhattan View: An audit opinion is not the end of a governance event

An unqualified audit opinion can close an accounting period without resolving the governance questions surrounding it. For Metrics Credit Partners, the next test is whether the firm can substantiate its valuations, explain any required corrections and establish fair treatment across affected investor groups.

Restoring redemptions would improve access to capital. Restoring confidence requires transparent valuations, credible independent oversight and liquidity terms consistent with the underlying assets.

For Australian private credit, the lesson extends beyond one manager. Strong reported returns cannot compensate for weak valuation controls or uncertain access to capital. Governance is not separate from credit quality; it is part of the investment structure.

Structure first. Yield second. Access only matters when valuation, governance and liquidity can survive independent challenge.

Sources

Financial-information disclaimer: This material is general information only and does not constitute personal financial, investment, legal, tax or credit advice. Several developments remain subject to final audit findings and public disclosure.

Manhattan Journal / End of note