Three funds face trading suspension over audited result discrepancies

Audited full-year results for three Metrics Credit Partners funds revealed “material differences” from earlier versions, leading to their temporary suspension from trading.

Suspension of trading

The ASX-listed Metrics Master Income Trust (MXT), Metrics Income Opportunities Trust (MOT) and Metrics Real Estate Multi-Strategy Fund (MRE) requested to voluntarily suspend their trading on 28 September.

This action followed the release of an unaudited version of the results on 31 August, while the finalised figures were due to be published by the 30 September deadline.

According to the fund’s responsible entity, Perpetual, the discrepancy could lead to “a risk of disorderly trading” if shares were not suspended.

Asset value reductions

Subsequently, Perpetual disclosed additional details about the significant discrepancies concerning the net asset value fluctuations since the unaudited results were released.

Metrics attributed the variance to four factors: how private market instruments were measured, adjustments to preliminary financial data, loan exposure considerations, and expected credit loss provisions tied to equity investments.

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In the case of the Metrics Real Estate Multi-Strategy Fund (MRE) and the Metrics Income Opportunities Trust (MOT), the portfolio’s debt exposure now represents 66 per cent and equity/equity-like investments represent 34 per cent, compared to 63 per cent and 37 per cent previously. The Metrics Master Income Trust (MXT) was unaffected in this sense.

Concerning the fair value of equity holdings in MRE and MOT, more emphasis was placed on negative scenarios and less favorable projections compared to the initial report. This led to changes in projected cash flows, discount rates, cap rates, development timelines, exit values, and development expenses.

Regulatory scrutiny

Earlier this year, ASIC urged private credit funds to verify that their 30 June asset valuations were up-to-date, accurate, and based on realistic assumptions to avoid misleading consumers.

The regulator emphasized that updating 30 June valuations is a priority in private credit and private markets. Valuations not reflecting current conditions or lacking accurate data increase the risk of misleading information and adverse investor results.

ASIC expects participants to challenge assumptions and refresh valuations to ensure they are based on realistic and supportable inputs. Participants should ensure financial reporting, audit and assurance practices support their 30 June valuations. Market participants should not wait for formal defaults before reassessing asset values and related risks.

It is possible that the amounts shown in the preliminary final report may differ materially from the final audited 30 June 2026 financial report, it said. A further statement from Pinnacle Investment Management, where Metrics is an affiliate, noted the pause in trading and said it held a 35 per cent equity interest in Metrics. This contributed $12.6 million to Pinnacle’s NPAT in the last financial year, it said.