Global banks including Goldman Sachs and UBS are becoming more selective about financing Australian private credit funds, according to a report by Bloomberg citing people familiar with the matter.
Lenders are prioritising larger, established managers while reducing appetite for smaller firms and those with significant property exposure. Existing commitments are largely being maintained.
The shift includes tighter lending terms and, where banks retain approval rights, blocking proposed deals. It comes as the sector faces a property downturn, higher borrowing costs and increased regulatory scrutiny.
Around half of Australia’s approximately AUD200bn private debt market is reportedly linked to real estate. Sydney developer Bathla Group entered insolvency in August owing AUD3.4bn, largely to private debt managers.
Judo Bank has also become more selective about financing private credit funds, according to the report. The bank disclosed approximately AUD445m of warehouse lending across nine facilities in August, alongside a strong pipeline of opportunities.
