The Australian Financial Review reported Wednesday morning that Count recommended to its group of 550 advisers to sell holdings in the ASX-listed Metrics Master Income Trust and Metrics Income Opportunities Trust, as well as the unlisted Metrics Direct Income Fund, citing concerns over private credit risks.
However, the decision has raised eyebrows, given Lonsec’s Highly Recommended rating on the Metrics Direct Income Fund and claims that Count made the call without meeting with Metrics - something InvestorDaily understands is a standard step in any due diligence process.
Speaking on a webinar on Wednesday, Andrew Lockhart, Metrics managing partner, said: “I have not, nor has any of my team, that I am aware of, ever met with anyone from Count Financial.
“I am not quite aware of any due diligence that they’ve undertaken in relation to any of our funds.”
Lockhart claimed that Pinnacle Investment Management had repeatedly invited Count Financial to meet with Metrics in recent years to discuss its funds, but Count declined each request.
“It is my understanding that on a number of occasions over most recent years, the Pinnacle investments team have sought to engage the team at Count Financial, encouraged to come and meet with the team at Metrics, those requests for a meeting and to do work in relation to understanding our funds have been declined,” he said.
“I am disappointed that the position that they have got to is a recommended redeem, and I’m certainly not aware of any reason why that would be an appropriate recommendation for an investor.”
In a separate statement to InvestorDaily, a spokesperson for Metrics said: “We’re very proud of the strong performance outcomes we’ve delivered for investors.
“MDIF [Metrics Direct Income Fund] has outperformed its investment objectives across all time periods with a history of no loss of investor capital. This is reflected through the highest possible ratings assigned to the Metrics Direct Income Fund from independent research houses including Lonsec and Zenith.
“Private Credit is growing because the asset class is meeting the needs of a large investment cohort, in particular those seeking an allocation that can provide capital stability, income, and portfolio diversification. We strongly believe this growth has a very long way to go.”
Count’s sell recommendation follows growing focus on private credit and private markets in general, with the corporate regulator last month publishing a paper in which it raised concerns about transparency and risk management in private markets, warning that greater regulatory scrutiny may be needed as the sector grows.
Citing ASIC’s recent report, Lockhart emphasised that Metrics' investment products are institutional-grade, with strong transparency and governance standards.
“Our role is to represent the interests of our investors, to ensure that we’re protecting and preserving investor capital and that we’re taking proactive steps to manage risk. And that was one of the things that ASIC pointed to, the need for the manager in private credit to be able to structure loans appropriately to manage risk and take appropriate enforcement action where required,” he said.
“I am very confident that our funds operate under the highest governance standards.”
In a comment to InvestorDaily, Count said the information published by The Australian Financial Review was sourced from a confidential email that was shared with its adviser network. Count’s policy, however, is not to publicly comment on its investment and research decisions.
