Private credit managers are reassessing portfolio allocations in response to escalating trade tensions, with a growing emphasis on geographic diversification away from the US, according to a report by Bloomberg citing market participants at SuperReturn Private Credit Asia in Hong Kong.
Amid mounting concerns over the impact of global tariffs on US-linked exposures, allocators are increasingly turning their attention to Asia and emerging markets as alternative sources of growth.
Speaking at the event, Susan Lee, Head of Asia Hedge Fund and Private Credit Investment Due Diligence at Albourne Partners Asia, noted that despite a potential slowdown in global growth, pockets of expansion persist across Asia.
The shift in sentiment follows growing unease over the implications of US President Donald Trump’s tariff policy, which many believe could place pressure on corporate earnings and credit quality. In response, managers are not only diversifying geographically but are also tightening deal structures.
There’s a clear trend toward stronger covenants, more rigorous equity assessments, and increased use of asset-backed financing, said Illya Zyskind, Senior Portfolio Manager for Emerging Markets at RBC BlueBay Asset Management. These measures, he added, are designed to help insulate investors from market volatility.
Despite the geopolitical headwinds, Australia remains a standout market, with several managers continuing to deploy capital there. The country’s private credit space is seen as relatively insulated from trade shocks and poised for robust expansion.
Nick Jacobson of Wingate Group said he expects Australia’s private credit market to double over the next three years, driven by opportunities in corporate leveraged loans and real estate lending. Phil Miall, Head of Private Debt Australia at QIC, echoed the sentiment, calling the market “one of the most attractive in the region” for credit investors seeking scalable exposure.
