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Heads of Australia’s corporate regulators have warned private equity funds and the country’s strong pension funds to not resist efforts to increase transparency in the private market to reduce the risk of a financial crisis.
Joe Longo, chairman of the Australian Securities and Investment Commission, which regulates listed companies, has been drawing attention this year on private markets with low transaction size, valuation and low visibility into potential conflicts.
This month, regulators are set to publish their most important report of 2025. The report will lay the foundations for expanding its role in monitoring Australia’s private capital later in the year.
“Does the next important crisis come from the private market sector? We are trying to publish questions and issues about that risk. I don’t want to set up a fuss about being caught up in a major crisis. But , this is an area that we need to understand better,” Longo told the Financial Times.
Although ASIC has historically not regulated the private market, the recent surge in private transactions has made them more aggressive when requesting information related to these transactions.
Longo said these approaches have already encountered “pushbacks” from the private equity and legal sector, but some large investors resist what was perceived as “interfering” regulators He said he was “limping” when responding.
“We’re just interested and we’re at work. You shouldn’t be that defensive,” Longo said he told people who resisted the demands of the ASIC.
“I’m agnostic about the public and private markets, but if I’m systematic, I’m not allowed to be an agnostic about risk,” he says, moving to a deeper understanding of ASIC’s private market trade. He talked about it.
As most trading flows have been in the private market, there has been a lack of new listings on Australian exchanges over the past three years.
This concludes in September when Blackstone agreed to a $16 billion acquisition of Sydney-based data center operator Airtrunk, which had previously been leaned to float on ASX. The transaction sparked “many curiosity,” Longo said, adding that such transactions raised concerns about ASIC’s ability to protect capital markets from risk. “We don’t have enough visibility,” he said.
Future reports will also consider the role of Australia’s $400 million (2.5 tonnes) “superannuation” system. In this system, the nation’s largest pension funds will play a leading role in both public and private investments. “Does supermarkets play a massive role in our capital markets? It’s an obvious question to ask, but the answer is not so obvious,” he said.
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Longo wonders whether ASIC is fundamentally responsible for the lack of Australia’s list, particularly in light of US President Donald Trump’s deregulation mantra, whether it needs to be done to attract more businesses to ASX. He said he was considering it.
“My preliminary view is probably not,” he said, pointing to signs that IPO activities began picking up after a long lull.
The Australian corporate sector has been shaken up by a governance scandal over the past six months. ASIC has launched a formal investigation into the mining company’s mineral resources and incited court cases against Bank ANZ against Bank ANZ against bond claims and HSBC against failure of fraud.
Longo said if he discovers a failure, he will continue to take strict boundaries against banks, insurance companies, super funds and “big edges of town.” “The market should be free to operate, but you need to be careful with anything that causes harm. If there is still a problem, expect to take action,” he said.
