The corporate watchdog has slapped an interim stop order on La Trobe US Private Credit Fund, citing concerns the product may be unsuitable for retail investors under Australia’s design and distribution obligations.
ASIC said it was worried the fund’s target market determination set an inappropriate suggested portfolio allocation given the risks, and failed to adequately specify an investment timeframe for retail clients.
The order prevents La Trobe Financial Asset Management Limited from issuing or dealing in interests covered by a product disclosure statement for the fund, or from providing general financial product advice to retail clients that recommends the fund. The measure lasts for 21 days unless revoked earlier.
The action stems from ASIC’s surveillance of retail private credit products, which has examined transparency, governance, valuation practices, management of conflicts of interest and fair treatment of investors as part of its wider response to changes in capital markets.
According to ASIC, the fund primarily invests in senior secured first‑lien term loans to US middle‑market corporates. Those companies are not rated by credit rating agencies, and investing in the loans carries above‑average risk, including volatility and potential loss of capital.
The fund was registered on 21 May 2024. Its half‑year report to 31 December 2024 recorded net assets of $215.8 million. Offers of Class B units appear to have begun in June 2024, with $8.2 million raised in that class during the half‑year, according to the regulator. La Trobe’s website describes the firm as one of Australia’s premier alternative asset managers, with $20 billion under management and more than 120,000 investors.
Design and distribution obligations require issuers and distributors to ensure target market determinations are clear, accurately reflect the product’s risks and features, and appropriately define the intended customer cohort. Regulators expect issuers to review and update TMDs as needed to keep them accurate.
ASIC said it has issued 91 interim stop orders and one final stop order under the regime since it began. The regulator has signalled it will continue to move quickly to disrupt poor practices and head off potential consumer harm where it identifies deficiencies in product governance.
