The collapse of Bathla Group, a major Australian property developer, has rattled the country’s private credit market.

The Sydney-based housing developer fell into administration on 25 August owing around A$3.4bn (£1.8bn), almost all of it to lenders outside the traditional banking system.

About 40 private credit funds have exposure, with individual positions ranging from A$1.5m to A$340m, according to ABC News.

Administrators from Teneo told a meeting of creditors on Friday (4 September) that secured lenders are owed A$3.1bn, with a further A$145m owed to the Australian Taxation Office, A$42m in land tax, A$130m to other unsecured creditors and A$4m in employee entitlements. The administrators stated that these are preliminary figures and are likely to change as the process continues. 

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The news comes as several funds with exposure to Bathla have restricted withdrawals. CVS Lane Capital Partners suspended redemptions across its First Mortgage Fund and Property Finance Fund in late August, disclosing exposure through nine separate loans. The Melbourne-based real estate debt manager, which has A$2.1bn in assets, said it would reassess by the end of October.

Sydney-based fund manager Centuria Bass moved earlier, pausing redemptions and applications to the Centuria Bass Credit Fund and the Bass Property Credit Fund on 14 August, eleven days before administrators were appointed, after an increase in redemption requests driven by concerns about Bathla.

However, managers without exposure to the Australian property developer have also moved.

ASX-listed MA Financial, which manages A$15.5bn in assets, capped monthly redemptions from its flagship real estate credit fund at one per cent of funds under management from 25 August, the day administrators were appointed to Bathla. The manager has said it has no exposure to the developer, citing broader market conditions.

It comes as US business development companies continue to feel the effects of the so-called “SaaS-apocalypse”, with redemptions from vehicles continuing.

Read more: BDCs turn defensive amid redemption pressure