Asia Private Credit Debate Changes to Soothe Jittery Investors

Some of Asia’s private credit firms are mulling changes to the industry including longer lock-up periods and higher redemption caps after turmoil in the US in recent months increased scrutiny from investors and regulators across the region.

Muzinich & Co., a global institutional asset manager specializing in corporate credit, said allowing a higher redemption cap above the typical 5% if some conditions are met is one of a slew of considerations being looked at by the sector, according to its Asia head. In Australia, managers are putting more focus on explaining underlying holdings and guardrails to investors. Meanwhile, regulators in Japan and South Korea are requesting better disclosure and data into the sector.