General FAQs - Private Credit FAQs

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These FAQs provide general information about RIAA product certification and private credit. Each product certification Guidance and Assessment Note contains specific FAQs.
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What types of private credit are in scope of RIAA's Certification Program?

The Program covers products with a broad range of private credit strategies where the applicant can demonstrate adherence to the Responsible Investment Standard.

Depending on the product structure, this may include direct lending, corporate lending, sponsor-backed lending, infrastructure debt, real estate debt, asset-backed lending, trade finance, project finance, sustainability-linked lending strategies, private credit fund-of-funds structures and other forms of private market debt exposure.

RIAA will consider the characteristics of the product and the responsible investment approach being implemented. Applicants will be asked to clearly identify the private credit exposures included within the strategy and explain how responsible investment considerations are applied across those exposures.

RIAA recognises that private credit continues to evolve rapidly, and applicants with novel structures are encouraged to engage with RIAA early in the application process.

RIAA applies the same substantive requirements of the Responsible Investment Standard across private credit strategies. The nature and extent of evidence, monitoring and disclosure considered during assessment will be proportionate to the product’s size and complexity, the structure and volume of exposures, information reasonably available, the materiality of relevant issues, the intended investor audience and the claims being made. Proportionality does not reduce the need to substantiate those claims.

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What level of look-through does RIAA expect for private credit products?

RIAA recognises that transparency varies significantly across private credit structures. Direct lending strategies may provide detailed borrower-level information, while fund-of-funds, NAV facilities, subscription facilities, asset-backed strategies or securitised structures may provide more limited visibility. RIAA will assess whether the applicant has sufficient information to support the responsible investment claims being made and demonstrate alignment with the Responsible Investment Standard.

Where full look-through is unavailable, applicants will be asked to explain why, identify what information is available and demonstrate what alternative evidence provides comfort regarding implementation. Depending on the structure, this may include the investment mandate, current portfolio information, exclusion framework, manager due diligence, information rights, governance, incident reporting, independent verification and escalation processes. RIAA will record material limitations and the evidence relied upon as part of the assessment.

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How does RIAA assess responsible investment integration across the private credit investment lifecycle?

RIAA does not prescribe a single private credit investment process. Certification assessment will consider whether responsible investment considerations are embedded at the stages where they can reasonably influence decisions and oversight, rather than being applied only as a separate policy or post-investment review.

Depending on the strategy, evidence may arise during origination and initial screening, borrower, sponsor, asset or project due diligence, credit assessment and approval, loan structuring and documentation, monitoring, stewardship and escalation, refinancing, work-out, and exit. The appropriate process and monitoring cadence may vary by sector and materiality. For example, site contamination or flood exposure in real estate may be assessed primarily before investment unless conditions change, while workplace safety, transition milestones or construction delivery may require ongoing monitoring.

The assessment will focus on whether responsible investment information reaches the relevant decision-makers, influences decisions where material and is supported by records that allow RIAA to understand the resulting action or rationale.

Example of sufficiency: A mid-market private credit manager documents material responsible investment issues in its screening and credit papers, records how they influenced approval and loan terms, assigns a risk-based monitoring cadence, and retains evidence of escalation or remediation where issues emerge during the facility term.

Example of insufficiency: A manager completes a separate ESG questionnaire after credit approval but does not incorporate the findings into the credit paper, investment decision, loan documentation or ongoing monitoring, and cannot demonstrate that responsible investment information has influenced any lending decision.
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How does RIAA assess innovation and emerging private credit structures that are not explicitly contemplated by existing certification guidance?

Private credit markets continue to evolve, and new financing structures may emerge over time. These may include Net Asset Value lending, hybrid capital solutions, revenue-based financing, specialist asset-backed lending structures, and other forms of private market debt. Not every private credit structure will be explicitly addressed by existing Certification guidance. Assessments will focus on the intent of the Responsible Investment Standard and the substance of the financing arrangement rather than whether the structure fits within a predefined category.

RIAA will seek evidence of how the structure operates, what activities are being financed, what responsible investment processes are in place, and how responsible investment claims are supported. The more novel the structure, the more RIAA will seek clear explanations and supporting evidence.
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How should applicants engage with RIAA where a private credit strategy sits at the boundary between multiple asset classes?

Some products may be designed with characteristics of private credit, infrastructure, property, private equity, or fixed income strategies simultaneously. RIAA will consider the substance of the strategy, the underlying exposures and how responsible investment considerations are applied.

Several Guidance and Assessment Notes may apply when assessing these products. Applicants should avoid relying solely on asset-class labels and instead provide sufficient information regarding portfolio construction, financing activities, and responsible investment implementation. Early engagement with RIAA is encouraged where product classification may be unclear.

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How does RIAA assess responsible investment in real estate debt and development finance strategies?

Real estate debt can require assessment at several levels - the legal borrower, the underlying property or development, material tenants or contracted end users, and the activities supported by the financing. The relative emphasis will depend on the structure and the responsible investment, sustainability or impact claims made by the product.

RIAA may consider pre-investment assessment of land and end use, contamination, physical climate risk, planning and environmental approvals, construction safety and labour risks, building efficiency, decarbonisation or resilience plans, relevant NABERS or Green Star ratings, tenant exposures and affordable housing characteristics where claimed. For development finance pre-sale or pre-commitment covenants, practical completion and occupation milestones.

Monitoring is expected to be proportionate to the claims made about materiality and the nature of the risk, and if applicable, RIAA’s quality and thresholds test. Stable, site-specific matters may be addressed mainly through robust pre-investment due diligence, while changing construction, tenant, safety, performance or delivery risks may require evidence of ongoing review. RIAA will assess whether the approach is documented, consistently applied and sufficient to support the product’s claims.

Example of sufficiency: A real estate development debt fund assesses the borrower and SPV, screens the intended end use and material tenant exposures, reviews flood and contamination risks, documents a Green Star target, and conditions drawdowns on QS (Quantity Surveyor) certification, cost-to-complete sufficiency and remediation of material safety or environmental issues. Reporting aggregates property types, locations and relevant performance characteristics without breaching borrower confidentiality.

Example of insufficiency: A property debt fund screens only the borrowing SPV, assumes that first-mortgage security makes responsible investment considerations unnecessary, and does not assess the underlying property, intended tenant or end use, climate exposure or claimed building performance despite marketing claims that may suggest otherwise.
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Does following ASIC, IOSCO or ACC/AIMA private credit guidance mean a product meets RIAA's Responsible Investment Standard?

Compliance with applicable regulatory obligations, alignment with international principles or adoption of industry guidance does not automatically establish that a product meets RIAA's Responsible Investment Standard. A growing body of regulatory and industry guidance supports good practice in private credit, particularly in governance, underwriting, valuation, liquidity, transparency, conflicts of interest and investor protection. Key resources as follows.

Australian Securities and Investments Commission (ASIC)

REP 814 – Private Credit in Australia (2025) examines market characteristics, growth, real-estate concentration, and emerging risks.

REP 820 – Private Credit Surveillance Report (2025) reviews practices across 28 retail and wholesale private credit funds, including disclosure, fees, conflicts, valuation, liquidity and credit-risk management.

REP 823 – Advancing Australia's Evolving Capital Markets (2025) sets out ASIC's ten principles for private credit funds operating well.

REP 821 – Private Capital Market Reporting: Global Practices and Lessons (2025) examines international approaches to private market reporting and transparency.

Private Credit Fund Catalogue of Key Legal Obligations and Regulatory Guide 181 – Managing Conflicts of Interest provide additional Australian regulatory guidance.

International Organisation of Securities Commissions (IOSCO)

Emerging Risks in Private Finance (2023) examines private credit and private equity market developments, liquidity, interconnectedness and potential systemic risks.

Principles for the Valuation of Collective Investment Schemes provides international principles for valuation governance, methodologies and controls.

IOSCO 2026 Work Program identifies ongoing international priorities relating to private markets and private credit.

Alternative Credit Council (ACC) / Alternative Investment Management Association (AIMA)

Australia Private Credit Introductory Guide 2.0 (2025) provides an overview of Australian private credit strategies, structures, investment considerations and risk management.

Private Credit Quarterly Market Updates provide market data on loan valuations, borrower fundamentals, debt serviceability and emerging risks.

These resources provide valuable regulatory, international and industry context but serve different purposes from RIAA Certification.

RIAA's Responsible Investment Standard assesses whether a product's stated responsible-investment approach is credibly implemented and substantiated. For private credit, this includes how relevant sustainability considerations are reflected in investment decisions, underlying financed activities, stewardship and lender influence, ongoing monitoring, Avoid Significant Harm requirements and sustainability or impact claims.

Managers should therefore refer to the Responsible Investment Standard and RIAA's Private Credit FAQs embedded within guidance and assessment notes to understand the applicable Certification requirements.

RIAA Certification does not replace compliance with applicable laws or regulatory obligations, nor does it constitute assurance of credit quality, valuation accuracy, liquidity, investment performance or investor suitability.

These external resources are provided for general information. Their inclusion does not imply RIAA endorsement, and readers should consult the original publications for current requirements and guidance.

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Where can I find credible resources on responsible investment in private credit?

There is a growing body of guidance specifically focused on responsible investment in private credit. In developing these FAQs, the resources that were most useful were those that address how ESG, stewardship, sustainability and impact considerations can be integrated into lending decisions, credit underwriting, borrower engagement, portfolio management and reporting.

Publicly available documents include guidance from the Loan Market Association (LMA) and the Asia Pacific Loan Market Association (APLMA) on sustainable lending practices, the UNEP Finance Initiative (UNEP FI)'s guidance for private market asset manager, the Institutional Limited Partners Association (ILPA)'s ESG resources for private markets, and impact investing frameworks and research developed by the Global Impact Investing Network (GIIN) and the Operating Principles for Impact Management.

These resources provide practical and market-recognised guidance on responsible investment approaches tailored to lending and private credit strategies. Apart from ASIC guidance, RIAA Responsible Investment Standard and other resources referenced elsewhere in these FAQs, these are likely to be the most directly relevant sources for investors seeking to implement responsible investment approaches within private credit strategies.

Private credit-specific resources

UNEP Finance Initiative (UNEP FI) - Call to Action to Private Market Asset Managers
https://www.unepfi.org/industries/call-to-action-to-private-market-asset-managers/

Institutional Limited Partners Association (ILPA) - ESG Resources
https://ilpa.org/esg/

Global Impact Investing Network (GIIN) - Financial Performance of Impact Investing Through Private Debt
https://thegiin.org/publication/research/private-debt/

Sustainable lending and private credit market standards