Metrics Real Estate Multi-Strategy Fund has released audited FY26 accounts with an unqualified KPMG opinion, reporting $28.2 million in profit after tax and 10.48 cents per unit in distributions. The accounts also expose a $10 million interest-free related-party loan and a temporary halt to applications and redemptions in underlying funds.
- KPMG issues an unqualified audit opinion
- $28.2 million profit after tax for FY26
- Distributions rise to 10.48 cents per unit
- $10 million interest-free related-party loan
- Underlying funds temporarily stop applications and redemptions
KPMG signs off on delayed FY26 accounts
Metrics Real Estate Multi-Strategy Fund (ASX:MRE) has cleared the immediate audit hurdle that had put its reporting and trading status under scrutiny, with KPMG issuing an unqualified opinion on the year ended 30 June 2026. The responsible entity said it and manager Metrics Credit Partners will continue considering the audit findings and whether any additional steps are required, leaving open the prospect of another market announcement.
Profit falls while distributions increase
The Fund reported profit after tax of $28.176 million in Australian dollars, down from $38.308 million in the comparable period. The comparison is affected by the prior period being the Fund’s first operating period, but the headline movement is clear: earnings per unit fell to 18.61 cents from 25.30 cents.
Distributions moved in the opposite direction, rising to $15.883 million, or 10.48 cents per unit, from $12.431 million and 8.21 cents per unit. Total assets reached $368.929 million, while net assets attributable to unitholders rose to $341.002 million. Reported net tangible assets per unit were $2.2521 at year-end, compared with $2.1501 a year earlier.
Unlisted valuations dominate the balance sheet
The Fund’s investment portfolio was valued at $362.391 million, representing 98.2% of total assets. Every dollar of those investments was classified as Level 3 under the fair value hierarchy, because the Fund values its interests in unlisted underlying trusts using their net asset values rather than quoted market prices.
The equity allocation increased to $213.0 million from $182.1 million, while the debt allocation eased to $149.4 million from $151.3 million. The manager reported that the Passive Trust held exposure to 168 debt assets, with 98% of the portfolio comprising senior-ranking loans, a weighted average credit rating of BB+ and a weighted average loan-to-value ratio of 72%.
Related-party funding and underlying fund restrictions
The accounts disclose a $10 million unsecured, interest-free loan from Metrics Real Estate Equity Opportunities Fund, an indirectly wholly owned sub-trust within the Active Trust structure. The facility can be drawn up to $15.9 million and was established to fund management and performance fees, working capital and other operating expenses. No amount had been repaid by 30 June 2026.
More consequential for liquidity, the underlying funds in which MRE invests had temporarily stopped accepting applications and redemptions after year-end. MRE therefore cannot acquire or redeem units while that cessation remains in place. The filing describes the event as non-adjusting, meaning it does not change the 30 June financial statements, but it does leave a practical question around how quickly the portfolio can generate liquidity outside the ASX market.
Further distributions declared after year-end
The Fund declared three further distributions after 30 June: 0.91 cents per unit paid in August, 0.92 cents paid in September and 0.85 cents declared for payment in October. Those payments maintain the income profile, but they also sit alongside the related-party funding and the temporary restrictions at underlying funds. The next material signal will be whether the responsible entity reports any additional consequences from its review of the audit findings, and whether normal dealing resumes in the underlying vehicles.
Bottom Line?
The unqualified opinion removes one immediate uncertainty, but the investment case still turns on Level 3 valuations, underlying-fund liquidity and repayment of the related-party loan.
Questions in the middle?
- What additional steps, if any, will follow the responsible entity’s review of the audit findings?
- When will the underlying funds resume accepting applications and redemptions?
- Can future distributions and operating cash flows reduce the $10 million related-party loan without further funding support?