Valuations Under the Microscope: ASIC REP 814 Explained

The problem REP 814 addresses

A listed bond reprices every second. A private loan to a property developer does not trade at all — its value exists only as an estimate. When investors subscribe and redeem at prices based on those estimates, valuation policy stops being an accounting detail and becomes the mechanism that determines whether incoming investors subsidise outgoing ones, or vice versa.

ASIC's Report 814, released in September 2025, reviewed how Australian private credit funds value assets, manage conflicts and disclose fees — and signalled that weak valuation governance will attract regulatory attention.

What good valuation governance looks like

The features regulators and researchers consistently point to: valuations performed by genuinely independent valuers on a defined cycle; trigger events that force a revaluation when a loan deteriorates rather than waiting for the calendar; a valuation committee with documented challenge; and disclosure to investors of the methodology, the frequency and any reliance on director valuations.

For loans secured over property, independence is especially important, because the value of the security drives the loan's impairment status. A valuation commissioned and paid for by the manager, from a valuer with an ongoing commercial relationship, is weaker evidence than one from an independent panel.

Labels and loose language

REP 814 also took aim at marketing language. Terms like 'investment grade' have a defined meaning in rated bond markets and no defined meaning in private credit, where no rating agency has assessed the loan. Using bond-market vocabulary for unrated private loans can mislead investors about the risk they are taking, which is why this site avoids such labels entirely.

What to ask a manager

Who values the portfolio and how often? What triggers an out-of-cycle revaluation? Have any loans been written down, and how were investors told? Are borrower-paid fees used to smooth distributions? How does the fund price units when loans are impaired? Straight answers to these questions are a baseline expectation in the post-REP 814 environment, not a courtesy.