Metrics Delays Reporting After $168m Fund Write-Down

Based on information provided to Metrics by auditors KPMG, “certain amounts and information will differ,” it said, with a final report due today (September 30). 

But Metrics told the markets on Wednesday that its auditor KPMG “would not be in a position to provide its audit opinion” by the due date. 

Metrics issued an identical notice for each of its funds that it would be delaying the release of its final audited financial reports. It said it would “continue to work towards the finalisation of the audited financial report” with KPMG. 

It did not provide a deadline for the accounts to be released. 

Metrics said the funds would remain in suspension until the reports were audited by KPMG, which has been under regulatory and public scrutiny this year after a data leak and whistleblower scandal.

Valuation “discrepancies” at a trio of Metrics funds

Each of Metrics Credit Partners’ three listed funds has been impacted, some more than others. 

The biggest percentage decline was in its Real Estate Multi-Strategy Fund. 

The net tangible asset (NTA) backing—the value of what a fund owns, minus what it owes, divided by the number of “units” on issue—of the fund has been reduced to $2.22 per unit.

This is a fall of 12.16 per cent, giving the fund a revised valuation of about $338 million.

▲ Metrics’s Sir Stamford hotel redevelopment in the Sydney Circular Quay area.

But the biggest cut in net asset value (NAV) was for Metrics Income Opportunities Trust. It dropped 10.08 per cent, a decrease of 22c per unit. This cut its NAV by $72 million. 

The Master Income Trust was reduced by 4c per unit, equating to 1.99 per cent, the smallest decline of the trio.

Collectively, the net asset value of the funds was devalued by an estimated $168 million, or about 4.7 per cent of the three funds’ combined NAV of $3.55 billion. 

But these numbers are not final. Auditors KPMG have said they cannot sign off on these figures just yet, so they are still subject to change.

Metrics Credit Partners audited 

The news comes during a choppy period for private credit, which has put emphasis on its transparency and accounting processes. 

Metrics has increasingly taken control of stalled projects after borrower defaults, including Orb Property’s 500-home North Melbourne site, Nautique at Rushcutters Bay [pictured top] and the Sir Stamford Hotel project in Sydney.

Given the rapid growth in private credit lending—a 500 per cent increase in ten years, according to the Australian Securities and Investments Commission—ASIC is taking a closer look at private credit, especially following the collapse of Bathla Group and its impact on non-bank lenders.