Alta, Southeast Asia’s largest digital marketplace for alternative assets, launches its Private Credit Sector Report for Asian Investors which was developed in partnership with Aletheia Capital.
The report assesses the merits of private credit as an investment category and its risks, while sharing recommendations for investors in Asia looking to consider private credit options.
According to the report, the private credit market may be on the cusp of a further boom. It is offering higher yields compared to traditional fixed-income investments – a yield that is three to four per cent above the 2-year US treasury funds level.
“Private credit is one of the fastest-growing asset classes in recent years and we are extremely excited to launch our Private Credit Sector Report in partnership with Aletheia Capital. At Alta, we are committed to helping investors consider a range of alternative investment opportunities, including private credit products like senior credit and venture debt as a means of increasing returns while mitigating macro risks,” said Alta Chief Commercial Officer Benjamin Twoon.
In a time of increasing demands for different and more flexible private market products, the size of the private credit market was estimated to have tripled to US$1.2 trillion between 2012 and 2022.
The 2022 UBS Global Family Office states that 27 per cent of the investors are taking on private debt, up from eight per cent in 2017. With the appetite for private credit among family offices set to rise, private credit will be an up-and-coming asset class in increasing interest rates and surging inflation.
Furthermore, venture debt may be at the heart of the private credit market in Asia as it continues to attract attention from investors keen on investing in early-stage companies – US$12.1 billion was disbursed in 2021, four times the 2018 level of US$3.2 billion.
Aletheia Capital Head of Consumer and Internet Nirgunan Tiruchelvam said, “Private credit can provide superior yields, lower volatility, and diversification in the current market environment. We are excited to launch our insights and views on private credit in partnership with Alta, who today offers some of the widest options for accessing private credit for accredited investors.”
The Federal Reserve will continue to raise interest rates in 2023 to re-normalise interest rates in the coming years. Private credit has emerged as a critical source of financing following the Global Financial Crisis as banks pulled back from issuing loans to private companies due to increased regulation.
Today, Alta is creating access to the widest array of alternative assets in the region, while enhancing liquidity in traditionally illiquid markets. Most recently, Alta has partnered with Hamilton Lane to enable pan-regional market access to a senior private credit fund available on Hamilton Lane’s Evergreen Platform. According to Hamilton Lane’s report, senior credit “can offer a favorable level of volatility and risk/return measurement” compared to other private credit indexes, offering a compelling opportunity to investors in the region considering various options for investing in private credit.
Moving forward, Alta will look to strengthen its commitment to revolutionize private markets access and liquidity in the region. Over the next few months, Alta will be launching new products and opportunities across Southeast Asia, bringing its full end-to-end services to some of the fastest-growing markets in the world.
