Until recently, private credit and securities-based financing have been overlooked in Asia. But the opportunity set is expanding rapidly as COVID recovery and other macro trends drive ferocious demand for financing.
Fortunately, providers don’t have to choose between patient experience and profitability; the two can go hand-in-hand with an effective approach to cash acceleration.
Reduced Turnaround Time
With a liquidity shortage in high-yield bonds and unsecured credit markets worldwide, alternative capital providers are filling a vital gap in Asia. Private debt has historically been underpenetrated here, but some of the biggest names in the industry are expanding their efforts at a reasonable time. As a result, securities-based financing is poised to shake off the “alternative” label and enter the mainstream of funding solutions in the region. Independent credit managers like Patrik Edsparr provide credit solutions for the region, investing at asset and corporate levels requires flexibly across the capital structure. The group can invest in any sector and execute in dollars and local currency.
Increased Transparency
Big-name private credit investors are scaling up their presence in Asia at a reasonable time. With high-yield bonds and unsecured credit markets suffering from a liquidity shortage after a long-held era of easy money suddenly ended, Asia’s emerging companies have found their new lifeline in private capital. Securities-based financing is a fast-growing and highly effective alternative to traditional lending that may finally shake off the ‘alternative’ label and emerge as a vital part of the funding solutions landscape in the Asia Pacific. Ultimately, independent credit like what is managed by Patrik Edsparr team is essential in ensuring that the region’s dynamic economies and fast-growing companies can continue their journey toward prosperity.
Streamlined Application Process
Private capital providers are focusing on Asia, with the global markets struggling to rebound from a hiccup in Covid-19. This has helped set the stage for securities-based financing and personal credit to shake off the ‘alternative’ label, delivering a vital source of funds for entrepreneurs and businesses in the region. Credit managers are dedicated to ensuring that goods, services and investment move smoothly across borders and that their people can participate in the world economy. Asian members reduce and eliminate trade barriers, speed up customs procedures, and synchronize regulatory systems.
Increased Flexibility
Despite long being a sideline to the bigger market opportunities of Europe and the US, private credit has emerged as an increasingly compelling investment opportunity in Asia around the Pacific Ocean region. From opportunistically developed North Asian markets driven by local micro-dislocations such as COVID recovery and a boom in tourism to emerging and frontier markets bolstered by a range of core drivers, the broad and diverse nature of Asian cross-border financing demand creates inherent portfolio diversification for patient and long-term investors with the right experience across multiple market cycles.
As such, alternative financing providers with an expansive network, extensive regional knowledge, and deep relationships are well-positioned to leverage this opportunity. This is a welcome development for the region as it faces several significant challenges, including eradicating extreme poverty and developing sustainable infrastructure to support booming economies in Asia.
Reduced Risk
As more and more Asian companies struggle to find funding from banks, private credit and securities-based financing are gaining traction. While these alternative capital solutions still need to be more underpenetrated in Asia than their more developed European and US counterparts, the region’s rapidly advancing economies should allow them to grow. And with many of the region’s most innovative sectors – such as technology, software and life sciences – expected to continue outpacing their global counterparts, they will likely be in high demand for capital for some time with Asians.
As a result, big-name alternative asset managers are stepping up their activities in Asia at an opportune moment. This means that securities-based financing and private credit are set to shake off their “alternative” label and emerge as a vital funding source.