From 28 September to 5 October 2026, investors could not trade three ASX-listed funds managed by Metrics Credit Partners, one of Australia’s largest private credit managers. The underlying unlisted funds also paused applications and redemptions. Some well-known monthly income investments went from “set and forget” to “trading suspended” in a single morning.
You do not need to own private credit for this to matter. Every SMSF paying an account-based pension has to pay a minimum amount this financial year, and in practice that minimum has to be paid in cash. This was a reminder of how quickly “easy to sell” can stop being true.
This article explains what private credit is, what happened, what the regulators are saying, and how a frozen or discounted investment flows through to an SMSF’s pension payments, investment strategy and year-end valuations. It is general information only. It is not a recommendation to buy, sell or hold any investment, and it is not personal financial advice.
For the broader SMSF rules on less common assets, see the SMSF Alternative Asset Guide. For the documentation requirement behind liquidity and concentration decisions, see the SMSF Investment Strategy Guide. For minimum drawdown rules, see the SMSF Pension Guide.
Key Takeaways: SMSFs and the Private Credit Freeze
- Private credit is lending to businesses and property developers that happens outside the banks. ASIC’s 2025 expert report estimated Australian private credit at around $200 billion.
- ASIC estimated real estate makes up 40% to 60%, or potentially more, of Australian private credit.
- On 28 September 2026, three ASX-listed Metrics funds - MXT, MOT and MRE - were suspended from trading after the audit process cut their NTA backing by 1.99%, 10.08% and 12.16% respectively. Metrics said on 28 September that it had no exposure to the collapsed developer Bathla.
- On 30 September, KPMG could not provide audit opinions by the deadline, and applications and redemptions in the unlisted funds behind the listed vehicles were temporarily suspended. The listed funds resumed trading on 5 October.
- Listed does not guarantee you can sell at asset value. MXT units closed at $1.76 on 25 September against audited NTA backing of $1.96, roughly 10% below.
- For an SMSF in pension phase, liquidity is a compliance issue. If the minimum pension is not paid, the ATO can treat the pension as having ceased from the start of the year for tax purposes.
- Partial commutations, including transferring assets out instead of paying cash, do not count towards the minimum pension.
Key numbers as at 8 October 2026
| Measure | Figure | Why SMSF trustees may care |
|---|---|---|
| Estimated size of Australian private credit | Around $200 billion | ASIC’s 2025 expert report lists SMSFs among the sector’s investors |
| Real estate share of private credit | 40% to 60%, or potentially more | Property lending is more exposed to housing and construction stress |
| Metrics Master Income Trust (MXT) NTA at 30 June 2026 | $2.00 preliminary, $1.96 audited | A 1.99% reduction, driven by higher provisions for potential credit losses |
| Metrics Income Opportunities Trust (MOT) NTA | $2.15 preliminary, $1.93 audited | Reported as a 10.08% reduction |
| Metrics Real Estate Multi-Strategy Fund (MRE) NTA | $2.53 preliminary, $2.22 audited | Reported as a 12.16% reduction |
| MXT closing price before suspension (25 September) | $1.76 | Roughly 10% below audited NTA backing |
| Trading suspension | 28 September to 5 October 2026 | No ASX trades possible in any of the three funds |
| Underlying fund redemptions | Temporarily suspended from 30 September | No ordinary application or redemption path while the suspension applied |
| Minimum pension factor, ages 65 to 74 | 5% of the 1 July balance | The cash the fund must pay each year, whatever its assets are doing |
Reduction percentages are as reported by the funds. Per-unit NTA figures are rounded to the cent, so dividing them will not exactly reproduce every percentage.
What is private credit, and why do SMSFs hold it?
Private credit is lending that happens outside the banks. A fund pools money from investors and lends it directly to borrowers, often businesses or property developers.
ASIC’s 2025 expert report described three broad Australian private credit segments: corporate lending, asset-backed lending and real estate, including construction and development finance. It estimated the market at around $200 billion, with real estate making up 40% to 60%, or potentially more.
The borrowers pay interest, and that interest flows back to investors as income. That is the appeal. MXT, for example, targets a return of the RBA cash rate plus 3.25% p.a. through the economic cycle, with income distributions intended to be paid monthly. With the RBA cash rate target at 4.60% from 30 September 2026, that target is 7.85% p.a. net of fees. Metrics notes this is a target and may not be achieved.
The simplest way to think about it: when you invest in a private credit fund, you are effectively becoming the bank. You receive the interest. What you do not receive is the protection attached to a bank deposit. There is no government guarantee, no APRA-regulated bank standing between you and the borrower, and no guaranteed way out.
Worked example: what the extra income is paying for
Assume an SMSF has $200,000 to invest for income.
| Option | Rate | Annual income on $200,000 |
|---|---|---|
| RBA cash rate target | 4.60% | $9,200 |
| MXT target return at the current cash rate | 7.85% | $15,700 |
| Difference | 3.25% | $6,500 |
That $6,500 a year is not free money. ASIC’s expert report said private credit investors are, in most cases, appropriately rewarded for taking sub-investment grade credit risk and liquidity risk, but that these risks are not always adequately described. The extra income is payment for two things: the chance that some borrowers do not repay in full, and the chance that you cannot get your money out when you want it.
SMSFs are part of this market. ASIC’s expert report lists self-managed super funds among the investor base, alongside large super funds, wholesale investors and retail investors. It also observed that some real estate funds targeting SMSFs offer monthly distributions of roughly 0.70% to 1.00%, about 8.4% to 12% a year before compounding, even though construction loans often do not generate regular interest payments.
What happened to the Metrics funds in September 2026?
Metrics did not happen in isolation. The sector had been under pressure for weeks.
14 August: Centuria Bass paused applications and redemptions in two credit funds after a rise in redemption requests linked to concerns about developer Bathla Group.
25 August: Bathla Group entered administration owing around $3.4 billion, almost all of it to lenders outside the banking system. The same day, MA Financial capped monthly redemptions from its flagship real estate credit fund at 1% of funds under management. MA said it had no exposure to Bathla and cited broader market conditions.
22 September: ASIC Commissioner Simone Constant told an industry summit that ASIC was “well beyond warnings” and the sector should prepare for enforcement action. ASIC said Bathla’s borrowings involved $3.4 billion from more than 40 lenders through about 540 special purpose vehicles.
28 September: Before the market opened, Metrics Credit Partners, which says it manages around $40 billion, halted trading in its three ASX-listed funds. The responsible entity, The Trust Company (RE Services) Limited, part of Perpetual, then requested a voluntary suspension. The audit process had produced lower NTA backing for all three funds than the preliminary figures released on 31 August. Metrics said it had no exposure to Bathla.
30 September: KPMG told Metrics it could not provide its audit opinions on the three listed funds’ 2025-26 financial reports by the 30 September deadline. Applications and redemptions in the underlying unlisted funds were temporarily suspended, and publication of NAV was paused. The responsible entity also suspended the distribution reinvestment plans for MXT and MOT, so distributions are being paid in cash.
5 October: After the audited accounts were lodged, the ASX lifted the suspensions and all three funds resumed trading.
As at 8 October 2026, the public materials reviewed for this article did not show that redemptions in the underlying unlisted funds had reopened. The 12 October review checked trading status and public regulator material; the detailed fund figures above remain stated as at 8 October.
What changed in each fund
| Fund | Preliminary NTA | Audited NTA | Reported reduction | Main driver disclosed |
|---|---|---|---|---|
| Metrics Master Income Trust (MXT) | $2.00 | $1.96 | 1.99% | Higher provisions for potential credit losses on loans |
| Metrics Income Opportunities Trust (MOT) | $2.15 | $1.93 | 10.08% | Audit adjustments to loan provisions and fair values |
| Metrics Real Estate Multi-Strategy Fund (MRE) | $2.53 | $2.22 | 12.16% | Mostly a lower fair value for unlisted commercial real estate equity investments |
Why did the audit change the numbers?
The NTA cuts were not cash losses that had already happened. They were changes in estimates. Private loans do not trade on an exchange, so their value depends on judgement: how likely the borrower is to repay, what the security is worth, and how long a recovery might take.
For MXT, the responsible entity said the reduction mainly reflected an increase in individually assessed provisions for potential credit losses, equal to 2.00% of NTA. It said the audited figures reflect different valuation inputs and probability weightings, including a more risk-weighted assessment of potential outcomes given interest rates, economic conditions and heightened regulatory expectations. It also stated the differences do not represent realised losses, and that loans on its watchlist remained 3.9% of the portfolio.
In plain terms, the auditor asked for more cushion against things going wrong, and that cushion came off the stated value of the units.
Two trustee lessons follow:
- Reported values for private loans are estimates. They can move sharply when assumptions are tested, even without a realised default.
- The listed price already told a story. MXT units closed at $1.91 on 30 June 2026, below the $2.00 preliminary NTA. By 25 September they had fallen to $1.76. The market was pricing in doubt before the audit result was announced.
MXT’s September distribution also moved lower. The September distribution was 1.30 cents per unit, payable on 8 October 2026, after 1.44 cents in July and 1.46 cents in August.
Listed vs unlisted credit funds: what changes when things go wrong?
A listed fund trades on the ASX. To get out, you sell your units to another investor, at whatever price they are willing to pay that day.
An unlisted fund does not trade. To get out, you ask the manager to buy your units back through a redemption process. If the manager pauses redemptions, you wait.
The Metrics episode showed both problems at once. The listed funds could not be traded at all for a week. The unlisted funds underneath had no market to sell on and no normal way out while redemptions were paused.
| Term deposit | Listed credit trust | Unlisted credit fund | |
|---|---|---|---|
| Who you are lending to | A bank | Businesses and developers, via a fund | Businesses and developers, via a fund |
| Government guarantee | Yes, Financial Claims Scheme for eligible deposits | No | No |
| How you get money out | Wait for maturity, or break early if allowed | Sell on the ASX to another investor | Ask the manager to redeem |
| Price you receive | Your deposit plus interest, subject to terms | Market price, which can sit above or below NTA | Unit price set by the manager |
| What could go wrong | Break fees, lower rate | Trading suspended; price below asset value | Redemptions paused or limited; no exit until reopened |
Worked example: the discount in dollars
Assume an SMSF holds 50,000 MXT units.
| Measure | Price per unit | Value of 50,000 units |
|---|---|---|
| Audited NTA backing | $1.96 | $98,000 |
| Closing price, 25 September 2026 | $1.76 | $88,000 |
| Gap | $0.20 | $10,000 |
If the fund had needed to sell that day, it would have received roughly 90 cents for every dollar of asset backing, before brokerage. A listed fund gives you a market, but only while trading is open, and only at the price buyers are prepared to pay.
The unlisted route has the opposite problem. The unit price may look stable because the manager sets it rather than a market. But while redemptions are paused, a stable price does not help you get cash.
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What are ASIC and the RBA saying about private credit?
ASIC’s 22 September message was blunt. Commissioner Constant said some long-standing weaknesses in private credit were being tested at scale for the first time, and that the sector was seeing significant cracks. ASIC said it was beyond warnings and the sector should prepare for enforcement action. ASIC’s REP 814 expert report and REP 823 capital markets report are useful background for trustees wanting to understand the regulator’s broader private-market concerns.
The speech made two points that matter directly to SMSF investors:
- Liquidity mismatch. Offering regular redemptions while holding illiquid, multi-year property loans creates a fragile product design that can break under pressure.
- Valuations and transparency. Managers need supportable valuations and clear disclosure about arrears, interest capitalisation, developer exposures and redemption rules.
The RBA’s October 2026 Financial Stability Review looked at private credit specifically. Its assessment is reassuring for the financial system and less reassuring for individual investors.
The RBA said that because Australian private credit grew from a low base, concerns about credit quality are currently more about investor protection than financial stability. It also noted that Australian private credit funds are more exposed to real estate, including construction and development, than overseas counterparts. Investors may face heightened risks of lower-than-expected, or negative, returns in a downturn.
Translation: this is not a banking crisis. If losses emerge, they are more likely to land on investors in the funds than on the banking system.
None of this means every private credit fund is in trouble, that losses are coming, or that private credit has no place in an SMSF. ASIC’s own position is that private credit done well has a valuable role. The hard part is telling which funds are doing it well.
Why does a frozen fund matter more for an SMSF in pension phase?
For most investors, a frozen fund is an inconvenience. For an SMSF paying a pension, it can become a compliance problem.
Every account-based pension must pay a minimum amount at least once a year. The minimum is a percentage of the member’s pension balance on 1 July, or on the start day for a pension that begins during the year.
| Age | Minimum percentage factor |
|---|---|
| Under 65 | 4% |
| 65 to 74 | 5% |
| 75 to 79 | 6% |
| 80 to 84 | 7% |
| 85 to 89 | 9% |
| 90 to 94 | 11% |
| 95 or more | 14% |
The ATO says that if the minimum is not met, the income stream is taken to have ceased at the start of the income year for tax purposes, the payments are not treated as super income stream benefits, and the fund cannot claim exempt current pension income (ECPI) for that year. There can also be transfer balance account reporting consequences, and a new pension may need to be started.
Since 1 July 2017, partial commutation payments do not count towards the minimum. Transferring units out of the fund to a member, instead of paying cash, is not a pension payment. So in practice, the minimum needs to be paid in cash.
Worked example: same balance, very different position
Take a hypothetical couple, Jan aged 68 and Peter aged 71, who each draw an account-based pension from their SMSF. On 1 July 2026, Jan’s pension balance was $520,000 and Peter’s was $380,000. Both are in the 65 to 74 bracket, so each must draw at least 5%.
| Cash needed in 2026-27 | Amount |
|---|---|
| Jan’s minimum, 5% of $520,000 | $26,000 |
| Peter’s minimum, 5% of $380,000 | $19,000 |
| Accounting, audit and ATO levy estimate | $5,000 |
| Total | $50,000 |
Now compare two versions of their $900,000 fund:
| Fund A | Fund B | |
|---|---|---|
| Cash | $40,000 | $15,000 |
| Private credit fund, redemptions paused | $150,000 | $300,000 |
| Other assets | $710,000 in ASX shares and ETFs | $585,000 residential property, about $20,000 net rent a year |
| Cash available this year, excluding the paused fund | $40,000 cash, plus listed holdings that can be sold if needed | About $35,000 cash and net rent |
| Shortfall against the $50,000 needed | About $10,000, covered by selling some shares | About $15,000, with nothing quick to sell |
Same total balance, same pension minimums. Fund A has an inconvenience: it may have to sell some shares at a time it did not choose. Fund B has a potential compliance problem if it cannot find the cash before 30 June 2027, because property cannot usually be sold in days.
The ATO has a narrow exception that can allow a pension to continue when the minimum has not been met. Broadly, it may apply where a small underpayment is no more than one-twelfth of the annual minimum and is quickly caught up, or where the Commissioner exercises discretion because the shortfall arose from an honest mistake or matters outside the trustee’s control. It is not something to plan around.
SMSFs also have a limited short-term borrowing exception under section 67(2) of the Superannuation Industry (Supervision) Act 1993 to make a required beneficiary payment. It is capped at 90 days and 10% of fund assets, and other conditions apply. That makes it a last-resort compliance issue to discuss with an SMSF adviser, not a normal liquidity plan.
What does the investment strategy need to say about liquidity?
Every SMSF must have a written investment strategy, and super law requires it to consider a set of factors. One of them, under regulation 4.09 of the Superannuation Industry (Supervision) Regulations, is the liquidity of the fund’s investments, having regard to its expected cash flow requirements.
The ATO describes liquidity as how easily the fund’s assets can be converted to cash to meet expenses and pay member benefits. Your auditor checks whether the strategy considered it.
A strategy that says “income assets 20% to 40%” but never explains how the fund will meet pension payments and expenses does not really address liquidity. This episode is a prompt to check whether yours does. Questions a review might cover include:
- How much cash does the fund need this year, and next?
- Which assets could be turned into cash within days, and which could take months or longer?
- Does any single investment carry a large share of the fund’s expected cash flow?
- Has the strategy been updated since the fund started paying pensions?
If trustees decide to change anything, the reasoning should be documented in trustee minutes and reflected in the investment strategy.
How should an SMSF value a suspended or discounted fund at 30 June?
The ATO’s guide to valuing SMSF assets sets different rules for different types of holdings, and the Metrics episode touches several of them.
Listed units, such as MXT, MOT and MRE. The ATO says listed securities, including listed managed units, should be valued at their closing price on 30 June. That means the market price flows into the fund’s accounts, not the NTA. Using the example above, 50,000 MXT units would have been valued at $95,500 on 30 June 2026, based on 50,000 x $1.91, not $100,000 at the preliminary NTA of $2.00.
Unlisted managed funds and unit trusts. For units in widely held trusts and managed funds, the ATO says the valuation should be based on the published exit price from the manager. Where a manager has paused redemptions or stopped publishing a price, trustees may need other objective evidence, and should keep a record of how the value was determined.
Significant events. The ATO lists macroeconomic events and market volatility among the significant events that can affect an asset’s value. When one occurs, trustees preparing accounts should obtain a new valuation, use one obtained after the event, or gather alternative evidence.
The practical point: if your fund holds a credit fund that has been suspended, gated or revalued, expect your auditor to ask how the 30 June value was arrived at. Keeping the fund’s announcements and unit price notices on file now makes that conversation easier.
Questions worth asking about any private credit fund
You do not need to be a credit analyst to ask useful questions. These are drawn from the practices ASIC has flagged.
- What is it actually lending to: corporate loans, property development, or both?
- How do I get my money out, and can that be paused?
- Who values the loans, and how often?
- Where is the income actually coming from, including interest capitalisation?
- Has the manager assessed itself against ASIC’s principles for private credit done well?
- How much of this year’s cash needs depend on this one asset?
If you cannot get clear answers, that is itself useful information to take to your adviser.
A simple liquidity check for SMSF trustees
On one side, write down the cash your fund needs before 30 June 2027: each member’s pension minimum, accounting and audit fees, the ATO supervisory levy, and any tax.
On the other side, write down what the fund could realistically turn into cash within a week: cash at bank, term deposits nearing maturity, and liquid listed shares or ETFs.
If the second number comfortably covers the first, the fund has more room to meet near-term bills without a rushed sale. If it only works because one particular fund keeps paying distributions, or never pauses redemptions, that is worth raising with your accountant or adviser now rather than in May.
The question at the heart of all this is simple: if your fund needed cash this year, how quickly could it get it?
Frequently Asked Questions
What is private credit?
Private credit is lending to businesses and property developers by funds rather than banks. Investors in a private credit fund receive the interest paid by borrowers as income. ASIC’s expert report estimated the Australian market at around $200 billion, with real estate making up 40% to 60%, or potentially more.
Why were the Metrics funds suspended in September 2026?
Trading in MXT, MOT and MRE was suspended on 28 September 2026 after the audit process produced lower NTA backing than the preliminary figures released in August. KPMG then said it could not provide its audit opinions by the 30 September deadline. The funds resumed trading on 5 October 2026 after audited accounts were lodged.
Did Metrics have exposure to Bathla?
Metrics said it had no exposure to Bathla. The Bathla collapse in August 2026 added to concerns across the private credit sector, but the Metrics revaluations related to audit adjustments to provisions and fair values.
Can an SMSF invest in private credit funds?
There is no blanket ban on SMSFs investing in private credit funds. Any investment must be consistent with the fund’s written investment strategy, which must consider risk, return, diversification, liquidity and expected cash flow requirements. Other super law rules, such as related-party restrictions, still apply.
Are private credit funds covered by the Financial Claims Scheme?
No. The Financial Claims Scheme protects eligible deposits held with Australian banks, building societies and credit unions. Units in a private credit fund are not deposits, whether the fund is listed or unlisted.
What happens if my SMSF cannot pay the minimum pension?
The ATO can treat the income stream as having ceased at the start of the income year for tax purposes. The fund cannot claim exempt current pension income for that year, there can be transfer balance account consequences, and a new pension may need to be started. The ATO can allow a pension to continue in limited circumstances.
Can I pay my pension minimum by transferring units instead of cash?
No. Since 1 July 2017, partial commutation payments, including in-specie transfers of assets, do not count towards the minimum annual pension payment. In practice, the minimum needs to be paid in cash.
How do I value a suspended private credit fund in my SMSF accounts?
Listed units are generally valued at their 30 June closing price. Units in unlisted managed funds are generally valued at the manager’s published exit price. Where an investment is suspended or affected by a significant event, the ATO expects trustees to use objective and supportable evidence and keep a record of how the value was determined.