The global private credit boom is rapidly expanding into Asia, with significant growth potential. Goldman Sachs and Mubadala Investment an...
The global private credit boom is rapidly expanding into Asia, with significant growth potential. Goldman Sachs and Mubadala Investment announced a $1 billion Asian private credit fund in February, following KKR’s $1.1 billion fund two years ago. While these figures are modest compared to Ares Management’s $34 billion U.S.-focused fund, Asia's market growth could be steep.
Michael Ewald of Bain Capital highlights that Asian credit markets surpass those of the U.S. and Europe combined, emphasizing the need for innovative approaches. Post-2008 financial crisis restrictions have limited traditional bank lending, creating opportunities for private credit.
Private equity in Asia is also poised for growth, with funds holding $486 billion in reserves at the end of last year. However, challenges remain, especially in China and Japan, where political and economic factors limit private credit expansion.
Despite these obstacles, the increasing demand for capital in Asia suggests a promising future for private credit in the region.
“Asian private credit is becoming a major focus for asset allocators,” says Michael Small of KKR, predicting significant attention in the next five to ten years.
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