Private credit managers focused on Asia are seeing increased investor interest as investors look to spread their risk amid the turmoil gripping the industry, according to a report by Bloomberg.
Recent concerns around US private credit exposures — particularly to software companies facing disruption from advances in artificial intelligence — have prompted withdrawals from funds managed by firms including BlackRock, Blackstone and Blue Owl Capital. In contrast, Asia-focused vehicles are viewed by some investors as relatively insulated from liquidity pressures due to more conservative underwriting standards and the predominance of closed-ended fund structures.
Some managers are already positioning Asia-focused strategies as alternatives. Siddhartha Hari, partner and co-head of Elham Credit Partners, told Bloomberg that the firm had recently received enquiries from LPs seeking exposure to Asian credit opportunities following developments in the US market.
The shift in sentiment follows a series of redemption-related developments across the sector. BlackRock recently capped withdrawals from its $26bn HPS Corporate Lending Fund at 5% after redemption requests exceeded the limit, while a flagship credit vehicle managed by Blackstone recorded a 7.9% redemption rate. Blue Owl also halted quarterly withdrawals earlier this year.
Bob Sahota, chief investment officer at Revolution Asset Management, told Bloomberg that the rapid growth of the US market had led to intense competition and faster deployment of capital, which in some cases resulted in weaker due diligence.
Despite these advantages, Asia’s market remains smaller and less mature than its Western counterparts, limiting the number and scale of available deals. Private credit assets in Asia Pacific are expected to grow from $59bn in 2024 to $92bn by 2027, according to industry estimates, driven by investor demand for diversification and higher returns.
