{"id":11672,"date":"2023-09-14T10:53:50","date_gmt":"2023-09-14T10:53:50","guid":{"rendered":"https:\/\/iqeq.com\/?p=11672"},"modified":"2023-09-18T11:06:49","modified_gmt":"2023-09-18T11:06:49","slug":"how-apac-managers-can-effectively-expand-their-private-credit-operations","status":"publish","type":"post","link":"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/","title":{"rendered":"How APAC managers can effectively expand their private credit operations"},"content":{"rendered":"<section class=\"text-block standard-spacing  \">\n    <div class=\"container fade-in\">\n        <p><em>By Vanessa Lopez, Head of Delivery, Loan Services<\/em><\/p>\n<p><strong>Asia is in the midst of a <a href=\"https:\/\/iqeq.com\/insights\/guest-post-private-credit-funds-in-asia-on-the-rise\/\">boom in private credit funds<\/a>. According to Reuters, at least <a href=\"https:\/\/www.reuters.com\/markets\/asia\/threat-down-rounds-spur-private-credit-funds-asia-2023-06-29\/\">$2.5 billion<\/a> in new private credit funds have been launched or planned so far this year, targeting start-ups in Asian markets. In 2022, private credit funds targeting Asia, Africa, Latin America, CEE and the Middle East increased by a <a href=\"https:\/\/money.usnews.com\/investing\/news\/articles\/2023-02-22\/private-credit-investments-surged-89-in-2022-report\">massive 89%<\/a>.<\/strong><\/p>\n<p>Private credit is an exciting and largely untapped frontier in Asia\u2014but it\u2019s also a complex asset class that requires specialised administration and management. As more managers in the Asia-Pacific (APAC) region participate in the credit market, many are struggling to understand their obligations to investors.<\/p>\n<p>In this post, we\u2019ll explore considerations for fund managers entering this space to help manage their growing portfolio of loans and achieve their target operating model.<\/p>\n<h2>The rise of private credit in APAC<\/h2>\n<p>Private credit is financing provided by a <a href=\"https:\/\/iqeq.com\/insights\/rise-non-bank-lenders\/\">non-bank lender<\/a>, such as an investment fund, and functions as an alternative to debt financing from banks or capital markets. Across the globe, private credit has grown exponentially over the past decade, <a href=\"https:\/\/www.harneys.com\/insights\/the-rise-of-private-credit-in-asia\/\">nearly tripling in AUM<\/a> between 2010 and 2020 to become the third-largest alternative asset class.<\/p>\n<p>In 2022, fundraising in Asia <a href=\"https:\/\/www.privatedebtinvestor.com\/could-2022-be-asias-breakthrough-year-for-private-credit\/\">exceeded European totals<\/a> in the first half of the year, and direct-lending players such as <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2022-05-30\/blackstone-targets-5-billion-for-asia-private-credit-business\">Blackstone<\/a> have recently announced plans to expand their operations in Asia.<\/p>\n<p>Among the reasons for this increase are:<\/p>\n<ul>\n<li>Regulatory changes for banks and a challenging lending environment<\/li>\n<li>Small and medium enterprise (SME) demand for credit<\/li>\n<li>Start-ups moving away from raising equity capital in a \u2018down round\u2019<\/li>\n<li>Greater investor interest in private credit<\/li>\n<\/ul>\n<h2>What do LPs expect?<\/h2>\n<p>Despite the flurry of activity in Asian markets, <a href=\"https:\/\/iqeq.com\/insights\/rise-private-credit-who-what-where-and-why\/\">private credit<\/a> is still a nascent part of the private markets and new entrants into the market don\u2019t have the middle- or back-office experience to effectively manage their loan portfolios in-house.<\/p>\n<p>Many managers seek to understand what LPs expect and what they should do to meet those expectations.<\/p>\n<p>After decades of experience in the private credit space, we\u2019ve found that LPs have two primary expectations:<\/p>\n<ul>\n<li><strong>Maximum return on investment: <\/strong>LPs look to managers who can focus on key investment functions and minimise their operational cost<\/li>\n<li><strong>Effective risk management: <\/strong>LPs expect managers to perform extensive due diligence on their credit portfolio to demonstrate that they effectively manage returns and default risks<\/li>\n<\/ul>\n<h2>Operational challenges of private loan administration<\/h2>\n<p>In seeking to meet these expectations, unique operational challenges face managers who have not yet established an in-house administrative model for private credit portfolios.<\/p>\n<ul>\n<li>First, managers must look closely at how they can achieve a target operating model to help track, manage and report both portfolio performance and the underlying covenants and attributes of loans<\/li>\n<li>Second, they must adopt best-in-class technology to ensure quality, scalability and security for their loan database<\/li>\n<li>Finally, managers must assemble an experienced loan operations team to meet operational efficiency expectations. A knowledgeable loan administrator is critical to improving efficiency and managing risk in private credit operations<\/li>\n<\/ul>\n<h2>Outsourcing for cost savings and greater efficiency<\/h2>\n<p>For many managers the precise operational requirements mean significant time and cost to implement new systems and hire the right staff. Outsourcing to a specialist service provider is the most effective option for private credit managers without the relevant expertise or infrastructure in-house.<\/p>\n<p>The benefits of outsourcing include:<\/p>\n<ul>\n<li><strong>Cost efficiency:<\/strong> Outsourcing allows managers to charge administration as a cost to the fund rather than to themselves as manager (as it would be if they were to build out the infrastructure themselves)<\/li>\n<li><strong>Expertise: <\/strong>Expanding into any new asset class requires familiarity with its nuances, and private credit is no exception. Outsourcing enables firms to leverage the industry expertise of long-time professionals without the time and cost of assembling an in-house team<\/li>\n<li><strong>Technology:<\/strong> An outsourcing partner like IQ-EQ can provide access to best-in-class technology platforms such as Allvue and Investran FIS<\/li>\n<\/ul>\n<h2>How IQ-EQ can help<\/h2>\n<p>IQ-EQ\u2019s managed loan services are designed to ease some of the pain of implementation. We pair best-in-class technology such as Allvue and Investran with our deep understanding of the private credit asset class and our experience as a global service provider.<\/p>\n<h4><a href=\"https:\/\/iqeq.com\/services\/loan-services\/\"><strong>Learn more about how IQ-EQ can help you manage your growing loan portfolio. Contact our expert team today.<\/strong><\/a><\/h4>\n            <\/div>\n<\/section>","protected":false},"excerpt":{"rendered":"","protected":false},"author":5,"featured_media":11674,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[1],"tags":[],"expertise":[20],"service_category":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How APAC managers can effectively expand their private credit operations<\/title>\n<meta name=\"description\" content=\"Private credit is an exciting and largely untapped frontier in Asia\u2014but it\u2019s also a complex asset class. We explore considerations for fund managers entering this space to help manage their growing portfolio of loans and achieve their target operating model.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How APAC managers can effectively expand their private credit operations\" \/>\n<meta property=\"og:description\" content=\"Private credit is an exciting and largely untapped frontier in Asia\u2014but it\u2019s also a complex asset class. We explore considerations for fund managers entering this space to help manage their growing portfolio of loans and achieve their target operating model.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/\" \/>\n<meta property=\"og:site_name\" content=\"IQ-EQ\" \/>\n<meta property=\"article:published_time\" content=\"2023-09-14T10:53:50+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-09-18T11:06:49+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/09\/shutterstock_1897533028-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1275\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"chantelleharvey\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"chantelleharvey\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/\",\"url\":\"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/\",\"name\":\"How APAC managers can effectively expand their private credit operations\",\"isPartOf\":{\"@id\":\"https:\/\/iqeq.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/09\/shutterstock_1897533028-scaled.jpg\",\"datePublished\":\"2023-09-14T10:53:50+00:00\",\"dateModified\":\"2023-09-18T11:06:49+00:00\",\"author\":{\"@id\":\"https:\/\/iqeq.com\/#\/schema\/person\/393f39d0fea3dcf3a9a5f42d3ffa8ef7\"},\"description\":\"Private credit is an exciting and largely untapped frontier in Asia\u2014but it\u2019s also a complex asset class. We explore considerations for fund managers entering this space to help manage their growing portfolio of loans and achieve their target operating model.\",\"breadcrumb\":{\"@id\":\"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/#primaryimage\",\"url\":\"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/09\/shutterstock_1897533028-scaled.jpg\",\"contentUrl\":\"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/09\/shutterstock_1897533028-scaled.jpg\",\"width\":2560,\"height\":1275,\"caption\":\"Marina Bay, SIngapore\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/iqeq.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"How APAC managers can effectively expand their private credit operations\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/iqeq.com\/#website\",\"url\":\"https:\/\/iqeq.com\/\",\"name\":\"IQ-EQ\",\"description\":\"Investor Services\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/iqeq.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/iqeq.com\/#\/schema\/person\/393f39d0fea3dcf3a9a5f42d3ffa8ef7\",\"name\":\"chantelleharvey\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/iqeq.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/940192f012e12857451827f360319942?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/940192f012e12857451827f360319942?s=96&d=mm&r=g\",\"caption\":\"chantelleharvey\"},\"url\":\"https:\/\/iqeq.com\/insights\/author\/chantelleharvey\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"How APAC managers can effectively expand their private credit operations","description":"Private credit is an exciting and largely untapped frontier in Asia\u2014but it\u2019s also a complex asset class. We explore considerations for fund managers entering this space to help manage their growing portfolio of loans and achieve their target operating model.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/","og_locale":"en_US","og_type":"article","og_title":"How APAC managers can effectively expand their private credit operations","og_description":"Private credit is an exciting and largely untapped frontier in Asia\u2014but it\u2019s also a complex asset class. We explore considerations for fund managers entering this space to help manage their growing portfolio of loans and achieve their target operating model.","og_url":"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/","og_site_name":"IQ-EQ","article_published_time":"2023-09-14T10:53:50+00:00","article_modified_time":"2023-09-18T11:06:49+00:00","og_image":[{"width":2560,"height":1275,"url":"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/09\/shutterstock_1897533028-scaled.jpg","type":"image\/jpeg"}],"author":"chantelleharvey","twitter_card":"summary_large_image","twitter_misc":{"Written by":"chantelleharvey"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/","url":"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/","name":"How APAC managers can effectively expand their private credit operations","isPartOf":{"@id":"https:\/\/iqeq.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/#primaryimage"},"image":{"@id":"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/#primaryimage"},"thumbnailUrl":"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/09\/shutterstock_1897533028-scaled.jpg","datePublished":"2023-09-14T10:53:50+00:00","dateModified":"2023-09-18T11:06:49+00:00","author":{"@id":"https:\/\/iqeq.com\/#\/schema\/person\/393f39d0fea3dcf3a9a5f42d3ffa8ef7"},"description":"Private credit is an exciting and largely untapped frontier in Asia\u2014but it\u2019s also a complex asset class. We explore considerations for fund managers entering this space to help manage their growing portfolio of loans and achieve their target operating model.","breadcrumb":{"@id":"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/#primaryimage","url":"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/09\/shutterstock_1897533028-scaled.jpg","contentUrl":"https:\/\/iqeq.com\/wp-content\/uploads\/2023\/09\/shutterstock_1897533028-scaled.jpg","width":2560,"height":1275,"caption":"Marina Bay, SIngapore"},{"@type":"BreadcrumbList","@id":"https:\/\/iqeq.com\/insights\/how-apac-managers-can-effectively-expand-their-private-credit-operations\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/iqeq.com\/"},{"@type":"ListItem","position":2,"name":"How APAC managers can effectively expand their private credit operations"}]},{"@type":"WebSite","@id":"https:\/\/iqeq.com\/#website","url":"https:\/\/iqeq.com\/","name":"IQ-EQ","description":"Investor Services","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/iqeq.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/iqeq.com\/#\/schema\/person\/393f39d0fea3dcf3a9a5f42d3ffa8ef7","name":"chantelleharvey","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/iqeq.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/940192f012e12857451827f360319942?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/940192f012e12857451827f360319942?s=96&d=mm&r=g","caption":"chantelleharvey"},"url":"https:\/\/iqeq.com\/insights\/author\/chantelleharvey\/"}]}},"_links":{"self":[{"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/posts\/11672"}],"collection":[{"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/comments?post=11672"}],"version-history":[{"count":6,"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/posts\/11672\/revisions"}],"predecessor-version":[{"id":11725,"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/posts\/11672\/revisions\/11725"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/media\/11674"}],"wp:attachment":[{"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/media?parent=11672"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/categories?post=11672"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/tags?post=11672"},{"taxonomy":"expertise","embeddable":true,"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/expertise?post=11672"},{"taxonomy":"service_category","embeddable":true,"href":"https:\/\/iqeq.com\/wp-json\/wp\/v2\/service_category?post=11672"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}