Letter from Singapore (Second of Two Parts)

Besides private credit, there’s growing volume in Singapore around private equity, real estate, and even venture capital. And investors there are researching specialty finance areas such as royalty financings, asset-backed, aviation, and legal settlement.

Fundraising for APAC private debt amounted to $14 billion in 2022, a rather modest figure compared to US and Europe, but a tick up from 2019’s $11 billion.

Under the private credit umbrella, direct lending has garnered interest, though skewed in favor of larger cap, more leveraged issuers where the banks do not play. Based on one of the PDI panels, there’s also keen Asia-Pacific appetite for more opportunistic and distressed paper.

There the yields are higher and the deal flow more idiosyncratic. It’s not clear if this translates to consistent income generation over the long-term.

At APB’s conference, an informal survey of attendees we spoke with revealed private wealth likes the asset class but also is seeking ready liquidity.