Counsel on Markets, Capital & Commerce
Australia's superannuation system is the envy of the world in theory. In practice, the gap between what fund members are promised and what the arithmetic of fees and returns actually delivers is a matter that the financial services industry has invested considerable energy in keeping opaque.
The private credit market has grown from a niche post-GFC phenomenon into what analysts now describe as a $3.5 trillion global market that rivals major segments of public credit — and it has done so largely outside traditional regulatory oversight. Unlike banks, private credit funds are not subject to the same capital requirements or prudential supervision. The risks accumulate in the dark.
ASIC has noticed. Private credit practices are among the regulator's new 2026 enforcement priorities — a signal, as RSM Australia has observed, that the regulator is increasingly concerned about poor governance frameworks, deficient risk management, and misleading disclosures in a sector that directly affects the retirement savings of ordinary Australians.
The superannuation system compounds the exposure. Australia's compulsory super regime means that the decisions made in the private credit and broader alternative assets space are not being made with sophisticated institutional capital alone — they are being made, at one remove, with the savings of nurses, teachers, and tradespeople who have no meaningful ability to evaluate the risks being taken on their behalf.
The illiquidity premium that private credit offers is real. So is the illiquidity itself. When conditions change — and they are changing — the question of who bears the cost is one that Australian regulators and fund members are not yet adequately prepared to answer.
Enforcement that proceeds only when the outcome is certain is not enforcement. It is performance. The distinction matters enormously to the integrity of financial markets.
More articles coming soonThe mortgage stress now being experienced by hundreds of thousands of Australian households was entirely foreseeable — and was foreseen, by those whose job it was to regulate the lending that created it.
More articles coming soonClaims handling practices in the life insurance sector that would, in any other context, attract the word fraud have been managed as a compliance issue. The difference is instructive.
More articles coming soon"In finance, as in law, complexity is often the enemy of accountability. When nobody can understand the structure, nobody can be blamed for the outcome."
Alan Jones QC — On Financial Transparency