Units in three ASX-listed Metrics funds resumed trading on Monday after KPMG signed off on audited accounts. The Opportunities trust fell 7.4% to A$1.50, against an audited net asset value of A$1.93. Investors in the unlisted funds still cannot get out.
An auditor-forced mark on Australian private credit has finally met a live market price, and the market came in lower.
Units in three listed trusts managed by Metrics Credit Partners resumed trading on the ASX on Monday, Australian time, after their audited accounts for the year to June 30 were lodged. The Metrics Income Opportunities Trust (MOT) fell 7.4% to A$1.50. The Metrics Real Estate Multi-Strategy Fund (MRE) fell 3.2%, and the Metrics Master Income Trust (MXT) slipped 0.2%.
The audited numbers
KPMG issued unqualified audit opinions on all three funds. The results confirm write-downs from the preliminary figures. MOT's audited net tangible assets came to A$1.9346 a unit, down from A$2.1428 a year earlier, after a loss of about A$69.2 million on its investment in an underlying wholesale fund. MXT's net tangible assets were A$1.9617 a unit, down from A$2.0000, with a revaluation loss of about A$47.1 million on fund investments. MRE reported A$2.2521 a unit before distributions, up from A$2.1501.
For MOT, the audited accounts also corrected an earlier disclosure that had transposed two adjustments. Commercial real estate equity and equity-like positions were reduced by 13 cents a unit and private equity positions by 5 cents, not the other way around.
A 22% discount, two exits
The most striking figure is the gap. At A$1.50, MOT trades about 22% below the net asset value its auditor has just signed. That compares a market price set on Monday with a valuation as of June 30, so the two are not perfectly matched. Still, a discount of that size says listed investors are pricing the trust's holdings well below the level the audit supports, or are demanding a large premium for liquidity, or both.
Liquidity is the other half of the story. The underlying funds into which the listed trusts invest "have temporarily ceased accepting applications and redemptions," a condition the accounts describe as a subsequent event. Unlisted investors cannot redeem at all. Listed investors can exit, but only at the discount.
Metrics and the trusts' responsible entity said they "will continue to consider the outcome of the audit findings and will consider the need for any additional steps to be taken," leaving the door open to further action.
Why it resonates beyond Australia
The episode arrives as regulators scrutinize private credit valuations. Australia's securities regulator put the industry on notice over valuation practices in June. Metrics is among the first cases in this cycle where an auditor overrode a large manager's marks and the result was then tested by a public market price.
What to watch: Any date for reopening redemptions in the underlying funds, any further steps flagged by Metrics, and whether MOT's discount narrows or widens over the rest of the week. A discount that persists would suggest the market sees more downside than the audit captured.