No longer niche: how private credit is transforming the APAC lending landscape
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In Europe and the United States, it now forms an established part of the corporate financing firmament as banks pull back from traditional lending.
According to Macquarie Asset Management in November 2023, the global private credit market is now estimated at around US$1.2 trillion, with annual fundraising growing particularly during Covid-19, from US$120 billion in 2021 to US$225 billion in 2022.
In the Asia-Pacific region, however, it remains a comparatively underpenetrated segment.
With banks reducing lending due to regulations, APAC's private credit market is set to grow, with Hong Kong uniquely positioned to capitalise on the surge, attracting investors seeking high-yield, asset-backed loans. Photo: Edmond So
According to data from Preqin Pro, Asia-Pacific-focused private credit fundraising inched higher to US$5.89 billion across 33 funds in 2024, up from the US$5.48 billion raised from 32 funds in the previous year.
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While the growth is modest, wealth managers in the region are increasingly excited by what they see as the potential for private credit to plug a widening lending gap and provide an attractive investment vehicle.
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