Private credit has successfully demonstrated its “durability” in the last 12 months, according to Metrics Credit Partners, with the firm flagging multiple positive tailwinds going into 2026.
In its outlook report for 2026, Six Trends for Private Credit in 2026, it described how the past 12 months have “underscored private credit’s durability” amid regulatory reviews.
ASIC’s long-awaited discussion paper on private credit released earlier this year had flagged concerns around valuation inconsistencies and varied liquidity practices.
But Metrics said any changes to industry standards enacted as a result will enhance investor confidence.
“[ASIC’s report] is expected to drive the introduction of new industry standards in 2026, strengthening transparency and reporting. These changes are likely to enhance investor confidence, and contribute to lifting overall standards across the sector.”
Metrics has previously come under scrutiny following Lonsec’s downgrade of three of its funds, which cited overlapping investment committees, related party transactions and rising equity exposure that the ratings agency said could blur the firm’s mandate.
The firm said that following the report, it intends to take an active role in shaping the future of private credit as industry standards are implemented.
Meanwhile, with Alvarez & Marsal’s annual review reporting that Australian private credit expanded 9 per cent to $225 billion by late 2025, Metrics said it expects this momentum to continue in 2026 driven by strong capital inflows, rising demand for corporate and CRE loans, and banks remaining somewhat constrained in meeting that demand.
It also highlighted the Reserve Bank of Australia’s (RBA) cash rate path, noting the recent shift in expectations that rates may not fall as much as previously anticipated, with several major banks this week even signalling a possible hike as early as February.
“For private credit, Metrics sees the shift in the rates outlook as a net positive. A slightly higher interest rate outlook should support total returns for investors and sustain capital inflows into the sector,” the report stated.
Finally, the firm struck a tone of “cautious optimism” for the year ahead, noting that while global uncertainty has intensified this year amid trade tensions and artificial intelligence (AI)-related fears, it hopes calmness will return in 2026 as market fundamentals improve.
Its six themes were:
- Cautious optimism as global headwinds subside
- Interest rates may not fall as much as previously anticipated
- Market fundamentals are likely to improve further
- Establishing industry standards should be a positive for private credit
- Private credit’s strong growth is set to continue
- Lending competition will likely remain strong
Concluding, Metrics managing partner Andrew Lockhart, said: “Metrics is focused on our core strengths: raising capital deploying it with discipline into high quality investments, and managing risk to deliver consistent outcomes for our investors.
“We also expect confidence in private credit to strengthen as regulatory clarity emerges. ASIC’s industry driven approach to standards will enhance transparency and trust, and Metrics intends to play a leading role in shaping this framework.
“Taken together, these dynamics point to a sector entering a new phase of maturity. In our view, the fundamentals of private credit remain very robust, and the opportunities ahead are significant.”
