The Australian Securities and Investments Commission (ASIC) has made interim stop orders against the La Trobe US Private Credit Fund and the 12 Month Term Account and 2 Year Account products offered under the La Trobe Australian Credit Fund.
For the US private credit fund, it said this was to protect consumers and retail investors from acquiring a product that may not be suitable for their financial objectives, situation or needs.
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It said this followed concern that the Target Market Determination for the fund suggests an inappropriate level of portfolio allocation given the risks, and does not adequately specify an investment timeframe for retail clients.
For the Australian products, it said there were deficiencies in the target market determination for both products. For example, it raised concerns that the accounts suggest an inappropriate level of portfolio allocation given the risks of the fund, and do not include appropriate distribution conditions.
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The interim orders prevent La Trobe from dealing in interests giving a product disclosure statement for, or providing general financial product advice to, retail clients recommending an investment in the funds. They are valid for 21 days unless revoked earlier.
The stop order referral arose from a retail private credit surveillance carried out by ASIC, which focused on fund transparency, governance, valuation practices, management of conflicts of interest and fair treatment of investors.
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La Trobe Financial states it is one of Australia’s premier alternative asset managers with AUD$20bn (£9.75bn) in assets under management and over 120,000 investors. It launched the private credit fund listed on the Australian Securities Exchange in May this year.
ASIC said that to date, it has issued 91 interim stop orders and one final stop order under DDO since the inception of the regime.
La Trobe’s chief investment officer Chris Paton said in a statement: “We always take great care to comply with our legal responsibilities. We will work closely with ASIC to address the concerns that they have raised.”
