{"id":6,"date":"2024-06-24T10:47:24","date_gmt":"2024-06-24T10:47:24","guid":{"rendered":"https:\/\/iqeq.com\/jp\/2024\/06\/24\/the-new-norm-of-private-debts-in-asia\/"},"modified":"2024-08-07T12:23:25","modified_gmt":"2024-08-07T12:23:25","slug":"the-new-norm-of-private-debts-in-asia","status":"publish","type":"post","link":"https:\/\/iqeq.com\/jp\/insights\/the-new-norm-of-private-debts-in-asia\/","title":{"rendered":"The new norm of private debts in Asia"},"content":{"rendered":"
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By Neil Synnott, Chief Commercial Officer, APAC and Clare Chang, Managing Director, Greater China<\/em><\/p>\n

Across the globe, private debt is experiencing a surge in popularity. This alternative asset class, offering attractive returns and diversification benefits, is rapidly becoming the “hottest” option for alternative investments. According to the International Monetary Fund (IMF)<\/a>, the private credit market, in which specialised non-bank financial institutions such as investment funds lend to corporate borrowers, topped $2.1 trillion globally last year in assets and committed capital. This resilient private asset class also boasts a 10% compound annual growth rate over the past decade, and the global private debt market is expected to reach a staggering $3.5 trillion by 2028<\/a>. In this global landscape, Asia is experiencing its fair share of similar growth dynamics. According to IMF and Preqin Pro<\/a>, data from 2023 indicated that Asia\u2019s allocation to private credit remains under-represented. While Asia contributed 36 percent to global GDP, the region comprises only 7% of global private credit assets under management. This implies that Asia\u2019s private credit market has significant growth potential.<\/p>\n

Beyond tradition: allure of the private debt market in Asia<\/h2>\n

The Asia private credit industry has the potential to grow as an appealing market for investors seeking high returns. According to a recent survey<\/a> conducted by alternative asset manager Coller Capital among more than 100 private markets investors, 72% of respondents wanted to increase their private credit holdings in Asia. The report also states that India and Southeast Asia are<\/a> seen as the most attractive markets for buyout opportunities in Asia.<\/p>\n

Private debt is generally accepted to refer to debt (i) provided by non-banks, (ii) not offered publicly and (iii) that is unlisted. Its strength is its diversity of strategies and transactions. Its longevity is due to its flexibility and how it can be reinvented for new financing opportunities. The recent growth of private debt arises from an undersupply in bank lending<\/a> coupled with the evolution of nonbank financial intermediaries.<\/p>\n

Here\u2019s a breakdown of the key factors:<\/p>\n <\/div>\n<\/section>\n\n

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1. Filling the gap left by traditional financing<\/p>\n

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