Labyrinth of Asia Regulations Leaves Private Credit Untapped
- Only $9 billion of funds was raised in 2021, Preqin data show
- Offshore funds without license can face lending restrictions
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Asia boasts some of the world’s largest and fastest-growing economies, but the region that’s keen for more investments accounts for only a fraction of the global private credit market.
From restrictions on foreign investment in India and China to Japan’s ultra-low returns, the mixed environment means investors face a fragmented if potentially lucrative market. The legacy of the Asia financial crisis means there’s a wariness of hot money flows, while currency volatility that may prompt costly hedging is a particular headache for debt investors.