On 26 February 2025, The Australian Securities and Investments Commission (ASIC) released a discussion paper called Australia’s Evolving Capital Markets: A Discussion Paper on the Dynamics Between Public and Private Markets. The paper was released to “seek engagement from participants in Australia’s capital markets, their advisers and other interested persons on important issues and implications arising from evolving changes in Australia’s capital markets” including to look at the interplay between both public and private sectors.
As some background, public markets cover listed entities, traded funds and public debt markets. The private market primarily covers private equity, private credit, unlisted infrastructure and unlisted property.
The article focuses on public and private markets and the shifting dynamics between each. Particularly there is a focus on the trending decline in public listings whilst private equity and credit asset classes appear to be experiencing significant growth.
The growth in private markets has been significant with figures provided by ASIC indicating that “Australian private markets AUM has nearly tripled over the past decade, increasing from A$57.1 billion in 2014 to A$148.6 billion in March 2024”. In particular private credit has gained strong attention as a growing asset class with the RBA estimating that the Australian private credit market now sits at approx $40bn.
In turn, ASIC has raised concerns about potential regulatory challenges associated with private markets, including transparency, valuation practices, conflicts of interest, illiquidity, disclosures and unfair treatment of investors including rising concerns around retail investors.
It's clear that ASIC's is placing increased regulatory focus on private capital markets. As the private market sector continues to evolve and grow, it may be crucial for private market businesses to implement appropriate infrastructure and software systems to efficiently manage their operational requirements, compliance and obligations as accurately as possible to promote confidence and transparency in the private market sector.
ASIC has raised a series of questions for consultation with market participants. Responses are due by late April. It is expected that there will be further updates later in the year once these submissions have been reviewed.
Titanium Digital is a funds management and lending software solutions provider to the constantly evolving financial and investment industry. Our solutions are well suited to private market operators to provide a more systemised approach to managing your operations, compliance and security.
If you want to get in touch with us, please email solutions@titanium.com.au or call us on 1300 885 100 within Australia (+61 2 9213 4777 from overseas).
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Disclaimer: The information on Titanium Digital Insights is for general informational purposes only and does not constitute legal or regulatory advice. Titanium is a software company, and users should consult qualified professionals to ensure compliance with applicable regulations.