Morningstar predicts platforms to pull Centuria Bass Credit Fund

Amid a ratings downgrade and possible governance issues concerning the Centuria Bass Credit Fund (CBCF), Morningstar predicts the property debt fund will be pulled from major investment platforms and unlikely receive new inflows.

In an analyst note examining parent company Centuria Capital Group (CNI), Morningstar cut its fair value estimate for the ASX-listed firm by 8% to $2.10.

CNI reached as high as $2.26 per share in mid-June and dropped to $1.50 at close of trading yesterday, following SQM's ratings downgrade and subsequent media reports suggesting that its exposure to the Bathla Group, a property constructor and developer, raised questions over its governance.

CBCF is a wholesale pooled private credit fund managed by Centuria Bass Credit. As at May 2026, CBCF had net assets of about $268 million, with roughly one-quarter linked to Bathla-related investments.

Morningstar said the SQM downgrade was significant because CBCF had substantial exposure to Sydney developer Bathla Group.

The ratings agency also flagged concerns regarding governance and the fund's exposure to a residential developer facing project delays and cost overruns.

"While Centuria doesn't directly invest in CBCF, it has recently tipped $4.5 million of balance-sheet capital into Bathla to provide some financial buffer, as a project in Sydney's Rouse Hill is facing delays and cost overruns," Morningstar said.

"Worse still, it could trigger waves of redemptions not only in CBCF but also across the broader Bass platform. Bass' assets under management aren't sticky. Unlike property funds, which typically have fixed liquidity windows and long investment timeframes, real estate credit is shorter-term, typically between 12 and 24 months."

This means Centuria Bass Credit has to constantly underwrite new loans to replace expiries and maintain assets under management (AUM).

CNI manages $21 billion in real estate AUM, of which $18 billion is in unlisted property funds.

The remaining $2.5 billion is in Centuria Bass Credit, the group's real estate finance or private credit arm.

While the real estate finance division is a relatively small part of Centuria's total AUM, Morningstar said, concerns over CNI's governance "could spill over to the main property funds management business, weakening prospective clients' confidence and, in turn, its ability to attract new capital."

Last week, Centuria moved to address market concerns over its Bathla exposure following media reports and the fund downgrade.

Reports questioned the relationship between Bathla Group and Centuria Bass Credit employee David Stone, and the alleged potential conflicts of interest, arguing that the lending relationship had been ongoing for more than three years, and Stone had only joined the firm in April 2025. CNI denied the allegations.