Institutional investors pivot toward Asian private credit

The Libra Hybrid strategy from Granite Asia attracted commitments from DBS Private Bank and various insurers, alongside anchor backers including Temasek, Khazanah Nasional, and the Indonesia Investment Authority. Since its 2025 launch, the fund has executed eight transactions and completed two exits. Meanwhile, Partners Group reports closing over five mandates with major institutional players in the past year, noting that sovereign wealth funds in Japan and Southeast Asia are aggressively increasing their exposure to the asset class.

Despite Asia accounting for one-third of global economic output, it represents only 4% of the global private-credit market. Data from Preqin indicates that while APAC-focused funds raised $2.7 billion in the first quarter of 2026, the region is poised for growth, with assets under management projected to reach $142 billion by 2030. Unlike the US and European markets, which lean heavily on sponsor-backed direct lending, Asian transactions increasingly focus on asset-backed financing, including real estate and infrastructure.

Market participants observe a selective approach from investors, who are prioritizing collateral quality and covenant protections. S&P Global Ratings notes that Australia remains a primary hub for senior secured lending, while regional demand is being further propelled by capital needs for data centers, artificial intelligence infrastructure, and the broader energy transition.