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Private debt takes off in Asia: AUM doubled in five years to $57bn at the end of 2019

Friday, March 13, 2020

Laxman Pai, Opalesque Asia:

The private debt market takes off in Asia as businesses expand and financing opportunity follows, said a study.

The private debt AUM has increased consistently over the past six years, more than doubling from $27bn at the end of 2014 to $57bn at the end of 2019, said 2020 Preqin Global Private Debt Report.

Traditionally a bank-financed market, Asia has endured much economic change in recent years, which has been accompanied by an increase in appetite for private debt funding.

Rapid growth in innovation has created a demand for credit in the mid-market borrower segment. At the same time, a swelling middle class has given rise to more opportunities in the private debt space - in a bid to expand businesses to capture the economic opportunity, the use of leverage has increased.

These factors have combined to boost growth in Asia-focused private debt AUM on a substantial level, the report pointed out.

The rise of investor interest in Asian private debt

Investor appetite for Asian private debt is rising across the globe as institutions look to diversify into newer markets in a bid to maximize yield.

Domestically, the number of private debt investors located in Asia has also increased from 115 to 477 over the past five years.

A growing middle class in the region has inflated demand for private debt, said the Preqin report.

Recent OECD figures predict that China and India will be home to approximately two-thirds of ......................

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