Metrics' Perth magic trick
Andrew Lockhart says we should all ask harder questions of private credit managers. Here goes.
Metrics Credit Partners CEO Andrew Lockhart used an op-ed in The Australian on May 3 to declare that investors should not retreat from private credit, an asset class whose meteoric rise in popularity is equalled only by its regulatory scrutiny.
Lockhart's prescription was that investors needed simply to ask harder questions of private credit managers in order to distinguish the honourable thieves from the genuine cowboys.
But retail investors cannot ask managers informed questions when the lack of disclosure means they don't know half of what's going on inside their funds.
Rampart's founder Joe Aston recently picked through the noodle diagram that is the Metrics empire, laying out its festival of related-party dealings and poor disclosure.
Joe Aston
Joe left one troubling aspect of Metrics' business model largely unexplored: its residential construction lending at what he called "confounding valuations". And fortunately, a Supreme Court battle in Western Australia between developer Simon Trevisan and the trustee for two Metrics-backed property loans Trevisan personally guaranteed has now brought those methods into the daylight.
