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Private Debt in ASEAN

by Andre Bally

  • 16 Jun 2017
  • PD

Preqin’s Private Debt Online currently tracks 36 fund managers that are based in ASEAN* and operate at least one private debt strategy. As challenging conditions have affected fundraising in the region, the aggregate amount of ASEAN-focused private debt capital raised since 2010 has yet to surpass the $1bn mark.

Among the 36 private debt managers in ASEAN, 24 firms are headquartered in Singapore, a further six are located in Malaysia and the remainder are spread over Thailand, Vietnam and Cambodia. Since 2010, ASEAN has attracted a total of $977mn in aggregate private debt capital across nine funds. Of this total, $592mn is from local GPs targeting mezzanine opportunities, and the remaining $384mn comes from international GPs targeting special situations investment.

It is worth noting that ASEAN-based managers have raised an additional $100mn in private debt capital for opportunities outside the region, targeting other strategies such as direct lending and distressed debt. A further $250mn is being sought by Singapore-based EFA Group for its direct lending fund EFA Real Economy Income Trust. The fund will provide structured senior secured loans to domestic mid-market companies that operate along the value chains of real economy sectors such as agriculture, industrials and manufacturing.

The private debt asset class within ASEAN could be due for gradual expansion; one possible reason for the low levels of capital raised in the region is the lack of quality lending opportunities within ASEAN countries due to regulatory or legal obstacles. However, the region is home to substantially more private equity funds – especially since Singapore is a growing favorite as a domicile location. As such, there is potential for further activity within debt restructuring in the near future, and the private debt space may then pick up a bit more traction.

*ASEAN is a regional organization comprised of 10 Southeast Asian states: Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar and Vietnam.

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