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    Markets

    Real Estate

    MA Financial freezes redemptions at its A$2.3 billion property credit fund, citing a deteriorating residential development market

    The Australian manager moved from a 1% redemption cap in August to a full suspension, and is winding up a smaller real estate income fund.

    HedgeWeekly News Desk ·

    ASX-listed MA Financial Group has suspended all applications and redemptions in the MA Secured Loan Series, an A$2.3 billion private credit fund that lends against Australian real estate. The manager disclosed the move in its third-quarter update this week. Its shares were down 7.7% at A$4.43 on Thursday afternoon in Sydney, according to Kalkine market data.

    MA said outflows from the fund stayed elevated because of problems in residential construction and development, where weaker conditions are stretching out asset sales and the refinancing of maturing loans. Financial Standard reported that the company also pointed to higher inflation and interest rates and to federal changes to negative gearing and capital gains tax. The fund had already limited withdrawals to 1% of its assets in August. MA called the freeze temporary but gave no reopening date, and said monthly income distributions should continue.

    Separately, the responsible entity of the MA Secured Real Estate Income Fund, which held about A$117 million at the end of June, decided on 19 October to terminate it. At group level, assets under management reached A$15.7 billion at the end of September, up 18% from a year earlier, with real estate private credit making up about 15%. Gross flows into unlisted funds, excluding institutional money, rose 11% to A$710 million in the quarter, but net flows fell 14% to A$245 million, and the group raised nothing through listed funds, against A$183 million a year earlier.

    For allocators, the case shows the liquidity mismatch in semi-liquid credit funds that promise periodic exits but hold loans that can only be repaid when property is sold or refinanced. MA went from a 1% cap to a full stop in about two months, so redemption terms gave investors little protection once outflows built. The points to watch are whether distributions keep coming as promised, how long the suspension lasts, and whether outflows spread to other Australian real estate credit products. MA says it has no exposure to the collapse of developer Bathla Group.

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