The Australian Securities & Investments Commission (ASIC) has ordered a temporary halt on retail investment into Fidante Partners’ Ares Global Credit Income Fund, marking a continued regulatory focus on the private credit sector. On Tuesday, ASIC imposed an interim stop order on Class A shares of the A$800 million fund, citing concerns about its target market determination (TMD), a document defining the intended investor profile for the product.

ASIC indicated that issuing the fund to retail clients within Fidante’s stated target market may not align with the clients’ financial circumstances, needs, or objectives. The TMD described the fund as suitable for investors prioritizing capital preservation and possessing a medium to high risk-return tolerance. It further suggested that investors could allocate up to 50% of their investable assets to the fund. ASIC Commissioner Simone Constant said the regulator would intervene promptly where products appeared accessible to retail investors for whom they were not designed, aiming to disrupt poor practices and protect investors from potential harm.

Approximately A$500 million of the Ares fund comes from retail investors, with the remaining A$300 million sourced from wholesale investors. ASIC’s stop order specifically targets the retail portion of the fund, or Class A shares. In response, a spokesperson for Fidante confirmed that the firm has paused new applications from retail and platform investors while addressing the details of the interim order. The spokesperson emphasized that this pause does not affect the fund’s ongoing management or its adherence to the stated investment objectives.

The Ares Global Credit Income Fund invests in a diversified portfolio, including global bonds, syndicated loans, and asset-backed securities such as mortgage-backed securities and collateralized loan obligations. The 21-day stop order prevents Fidante from dealing in the fund or recommending it to retail clients during this period.

This measure is part of a broader crackdown by ASIC on private credit products, which have come under increasing scrutiny over issues related to valuation, liquidity, and disclosure standards. In recent weeks, the regulator has imposed similar stop orders on several private lending schemes suspected of misleading retail investors. These include the ASCF Premium Capital Fund, ASCF Select Income Fund, and ASCF High Yield Fund, managed by Australian Secure Capital Fund, as well as three private credit products operated by Melbourne Securities Corporation.

ASIC heightened its surveillance of the private credit sector last year amid concerns that these markets could pose systemic risks in the event of a financial downturn. The regulator is expected to release findings from its latest sector review soon, focusing on emerging liquidity pressures and valuation challenges within private credit markets.