By Neil Synnott, Regional Chief Commercial Officer, Asia-Pacific
In recent years, the Southeast Asian structured credit market has undergone a fundamental transformation, evolving from a fragmented landscape of niche opportunities into a sophisticated, institutionally-backed asset class. Once seen as an opaque lending frontier, the market has become a transparent and standardised venue for global capital.
In this article, we’ll explore some of the factors that are shaping the region’s credit landscape at present. We’ll also look at why robust operational infrastructure is critical for managers that are operating within the region today.
Scaling rapidly and becoming more institutionally driven
Between 2022 and 2024, APAC private credit assets under management (AUM) grew from $45 billion to $59 billion. Looking ahead, the Alternative Investment Management Association (AIMA) forecasts that AUM will rise to $92 billion by 2027 – a 16% compound annual growth rate (CAGR) between 2024 and 2027. At the heart of this growth story lies increased institutional participation, which is providing deeper pools of capital for managers.
Whereas once upon a time, the APAC private credit market was largely the domain of ‘special situations’ funds, today the market is dominated by long-term institutional players such as insurance companies, sovereign wealth funds, and family offices. For these investors, the APAC region’s varied economic landscape offers compelling diversification benefits, both across geographic markets and within individual jurisdictions.
Beyond supplementing traditional private credit exposure across North America and Europe, investors can benefit from unique opportunities, whether that’s lending to early-stage FinTech companies that are helping to address Asia’s financial inclusion gap, or providing long-term capital to help plug the multi-trillion-dollar infrastructure lending gap.
The emergence of repeatable structures
Another major factor behind the growth of the market is repeatable structures. In the past, private credit in the APAC region was characterised by bespoke, one-off deals. This was in part due to the complexity of the market. In this area of the world, there are more than 50 distinct jurisdictions, all with differing legal, regulatory and tax frameworks. As the market matures, bespoke approaches are starting to give way to more repeatable, standardised execution formats. This is an enabling institutional capital to move faster and more efficiently, particularly as familiarity grows through repeat transactions.
A good example is data centre financing. Here, a lender could establish a master framework agreement (MFA) with a developer. Then, as the developer adds new data centres, financing can be replicated using pre-agreed terms, covenants, and reporting requirements. This reduces legal costs and due diligence time, allowing institutions to deploy capital quickly rather than having to start from scratch every time.
It’s worth noting that the rise of evergreen fund structures (funds that don’t have a fixed 10-year end date) is also playing a role here; these are providing permanent capital that is supporting repeatable lending.
Improved regulation and governance
Of course, improved regulation has also been an important growth driver in recent years. In the past, institutional investors often avoided certain APAC markets due to creditor unfriendliness. Recent regulatory reforms such as India’s Insolvency and Bankruptcy Code (IBC) and Singapore’s Insolvency, Restructuring and Dissolution Act (IRDA) are changing this, however. These kinds of frameworks have strengthened creditor rights and provided clearer recovery pathways, creating more stability within the market and drawing institutional investors in.
Significant fundraising activity
As a result of all these growth drivers, we’re seeing a high level of fundraising activity at present. Just look at some of the developments announced in recent months:
- December 2025: Granite Asia completed the first close of its Libra Hybrid Pan-Asia Private Credit strategy, securing over $350 million. This fund is anchored by major sovereign players including Temasek, Khazanah Nasional, and the Indonesia Investment Authority (INA)
- January 2026: The KKR Asia Credit Opportunities Fund II (ACOF II) closed with $2.5 billion in total investable capital (comprising $1.8 billion in the main fund and $700 million in SMAs). This is currently the largest pan-regional performing private credit fund in the APAC region
- February 2026: MA Financial and CMB International (CMBI) partnered to launch the MA CMBI APAC Credit Opportunities Fund with a target size of $600 million. The fund will focus on senior secured leveraged loans for sponsor-backed borrowers
The opportunities and challenges for managers
Looking at these deals, it’s clear that for alternative investment managers, there’s a huge opportunity here. With financing demand for infrastructure, renewable energy, and technology outstripping the lending capacity of traditional banks, and institutional investors becoming increasingly interested in gaining portfolio exposure to the APAC region, managers can position themselves as strategic orchestrators able to bridge the gap between global capital and regional growth.
That said, managers face some challenges in this area of the alternatives space. Navigating constant regulatory changes is one major challenge. Today, a number of regulators across the APAC region are accelerating reforms in OTC derivatives reporting designed to improve data standardisation and reporting governance. These changes are likely to affect any manager undertaking hedging for cross-border deals.
Another challenge is in relation to the changing nature of the investor base. With private investors’ share of APAC private credit AUM projected to rise from 23% in 2020 to 28% by 2027 according to AIMA, managers are likely to experience growing demand for stronger governance, clearer reporting and more robust operational frameworks.
To handle these challenges effectively, firms need to partner with an experienced cross‑border administrator who can help navigate regulatory, operational and governance complexities. In the years ahead, operational discipline is going to be as important as growth.
Catch IQ-EQ at ABS Asia 2026
At IQ-EQ, we have structured finance expertise with robust local presence across the APAC region, including Hong Kong, Singapore and Australia. To learn how we can help you succeed in the APAC private and structured credit markets, contact us here.
We’re also sponsoring the upcoming ABS Asia 2026 conference, taking place in Hong Kong between 25-26 March 2026. If you’re attending, please don’t hesitate to visit our booth or catch my panel discussion, ‘Alt Credit from Alt Markets: The Emergence of Southeast Asia’ on 25 March at 4.15pm. We hope to see you there!
