If you have a private debt platform in Australia right now, APRA's increased scrutiny means one thing: your next hire matters more than your last ten.
Australia's private debt market has reached $224 billion, more than double its level five years ago. As traditional lending dynamics shift and regulatory capital requirements evolve, private debt has become an increasingly important part of the corporate funding landscape. The growth opportunity is real.
But so is the regulatory scrutiny.
Since 2018, APRA has expanded reporting requirements for non-bank lenders. They're tightening governance standards across the board. In June, they fined a trustee $782,500 for missed reporting deadlines. Professional oversight isn't optional.
Here's the challenge: some leadership teams in Australian private debt have never managed through a serious downturn. Australia's last real recession ended in 1991. That's 34 years ago.
Yes, I remember it. Unfortunately. (Showing my age here, although I did start young.)
Some executives building today's portfolios have largely operated in a one-way market. And when regulators increase scrutiny, they're not just looking at your processes. They're assessing whether your team has the judgment to handle what comes next.
Leaders who've restructured deteriorating credit books under pressure. CROs who know how to build covenant frameworks that hold when tested. Portfolio managers who've had tough conversations with LPs during markdowns. Workout specialists who can navigate complex, multi-party negotiations. Executives who've reported bad news to boards or investors before regulators forced the issue.
These aren't theoretical skills. It's the difference between managing through stress and scrambling when it hits.
Leaders with genuine downturn experience aren't common in the Australian market, not because of age, but because we haven't had one in over three decades. Those who managed stressed portfolios during the GFC or came through earlier credit cycles bring a different perspective on risk management and covenant discipline.
If you're scaling a private debt platform, the question isn't whether you can find people to underwrite deals in a hot market. It's whether you're building a team that can handle the full credit cycle.
A few things that actually help: look beyond pedigree, the best risk officer might not come from the obvious firms. Hire experience before you need it, waiting for stress to build your workout capability is too late. And assess for judgment, not just technical skill. Ask candidates how they've handled situations where the playbook didn't exist.
APRA isn't being unreasonable. They're betting that credit cycles still exist, even in Australia.
If you're building or strengthening your private debt leadership team and want to talk through what experience actually matters in this environment, happy to share what we're seeing in the market.
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