Private Credit in Asia Pacific: Navigating the region

April 2024

Over the past decade, private credit has grown significantly in the global sphere, forming a major pillar for business financing. The growth of private credit in Asia Pacific in recent years has signalled that the asset class is more than just an alternative option for funding, but a response to the market’s needs and the constant changes in economic dynamics.

Evolving demand and supply drivers, as well as Asia Pacific-specific industry trends, are changing the market structure of finance and the importance of private credit cannot be overstated. Traditional avenues of lending and private lending are collectively fulfilling the range of funding needs of different borrower types in the economy and driving long-term investment opportunities in Asia Pacific.

As the market demand for private credit continues to surge, it is important that asset managers looking to set up private credit funds consider several key fundamentals: fund structuring, capital and fund raising, pre-investment and sourcing, due diligence, investment management, and exit strategy and refinancing. Furthermore, the need to implement robust risk management, self-regulation and portfolio monitoring practices into investment frameworks and decisions are crucial to fulfil the needs of investors and borrowers in the region.