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Count Financial and Metrics (MXT) – is there more to it?

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Question asked 22/03/2025

Count Financial and Metrics (MXT) – is there more to it?

Hi MXT took a tumble on Wednesday (down 9 cents at one stage although it finished down 4.5c) and after a bit of digging I found an AFR report that Count Financial had recommended all it's advisers sell any Metrics holdings. I don't know if the advisers took the advice and that's what caused the selldown or whether there's something else going on to prompt the rush for the exits. Metrics responded that Count have never met with them despite several invitations to do so. Count's recommendation seems a bit over the top (especially if they haven't spoken to Metrics) - is there something else behind the advice? I also note that the AFR seem to have had quite a number of stories regarding Metrics over the last few months (some of the coverage has been a bit lukewarm) - is there a reason for so much interest in a company that on the face of it probably shouldn't attract much attention? Should Metrics investors be concerned? Cheers, Carl

Answer

Hi Carl,

Metrics Master Income Trust (MXT) did indeed get spanked on the 12th of March as you say as Count Financial, who have over 100,000 clients and a network of almost 550 financial advisers did indeed put a sell on the LIT – the recommendation was part of a broader review of private credit investments, prompted by increased instability in the asset class.

MXT is a $2.1bn business but on Thursday for example only ~$4.5mn worth of units traded hands, likely to be less than was held by Count clients hence a spike lower due to some overzealous selling could easily explain the spike lower in price.

MXT is a listed trust that provides exposure to a diversified portfolio of direct loans to Australian corporates, managed by Metrics, which has around $23bn of funds under management (FUM).

It was a strange move from Count as it was not supported by their research provider (Lonsec), and as you rightly point out, on a conference call after the article was released, Metrics confirmed Count had not engaged with them in any way to conduct due diligence. That said, Private Credit is in focus with ASIC, and Metrics is the largest local operator. They’ve had some well publicised issues having to seize control of Pacific Hunter Hospitality, owner of Rockpool Bar & Grill in Sydney, which Metrics now own. Debt providers becoming restaurant owners at a time when Private Credit is in focus from the regulator is news worthy. ASICs concern we believe would be that retail investors are buying into MXT as a fixed income investment, not with the intention of being the owner of equity in a restaurant.

Overall, we think MXT are good managers, but private credit is probably riskier than it’s made out to be. We don’t think investors should be concerned if they have an exposure as part of a broader mix, i.e. not all eggs in the private credit basket.

We covered this topic and others around Income Securities in a Webinar on Friday – a recording can be viewed HERE.

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Metrics Master Income Trust (MXT)

LAST UPDATED 20/03/2025 15:52

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