Asia Private Credit Set to Surge 56% by 2027

What's New

The Alternative Credit Council's "Private Credit in Asia 2.0" report forecasts Asia-Pacific private credit assets under management will grow from US$59 billion in 2024 to US$92 billion by 2027, representing a 16% compound annual growth rate that outpaces global averages. This expansion is driven by institutional investors seeking yield diversification and accelerating inflows from private wealth channels, with wealth investors projected to comprise 28% of regional AUM by 2027, up from 23% in 2020.

Why It Matters

Private credit in APAC is transitioning from a niche offering to a mainstream asset class at a critical moment when traditional bank lending—which still dominates 80% of regional credit markets—leaves a staggering US$2.5 trillion financing gap for SMEs and mid-market companies. As nearly two-thirds of global economic growth originates from APAC, the region's underserved borrowers and massive infrastructure needs create a structural opportunity that could reshape how businesses across 50+ distinct markets access capital.

Big Picture Drivers

• Bank retrenchment: Traditional lenders focus on investment-grade clients, leaving SMEs and mid-market borrowers underserved with only 22% of bank loans reaching small businesses

• Infrastructure demand: US$26 trillion in investment needed through 2030 across renewable energy, digital infrastructure, and transport projects

• Demographic shift: APAC's middle class projected to reach 3.5 billion consumers by 2030, driving capital needs across healthcare, education, and consumer services

• Regulatory evolution: Financial hubs like Singapore and Hong Kong offering favorable regimes while markets like India implement supportive reforms through IBC and SEBI AIF changes

• Wealth channel expansion: Semi-liquid fund structures and lower investment minimums democratizing access for high-net-worth investors

By The Numbers

• US$92B: Projected APAC private credit AUM by 2027

• 16%: Compound annual growth rate from 2024-2027

• 90%: Share of deals involving sponsorless borrowers (vs. 60% globally)

• US$2.5T: Estimated SME financing gap across the region

• 36%: Portion of AUM in special situations strategies

Key Trends to Watch

• India emergence: Private credit investment volumes reached US$9 billion in H1 2025 alone, with deals exceeding US$100 million representing 80% of total deal value.

• Japan awakening: Major players including Blackstone and KKR made first dedicated private credit hires in 2025 as domestic investors seek alternatives to low-yielding traditional fixed income.

• Bank-fund partnerships: Strategic collaborations between private credit managers and traditional banks' dedicated platforms are expanding deal flow across the SME financing value chain.

• Local currency solutions: Global managers launching domestically-denominated credit vehicles in markets like India and Australia to sidestep FX volatility and comply with onshore investment rules.

The Wrap

Success in APAC private credit requires managers to combine global institutional standards with deep local expertise—importing Western models won't work in a region where relationship-driven origination, bespoke deal structures, and regulatory complexity demand specialized capabilities. The winners will be those who invest in on-the-ground presence, build trusted partnerships with local institutions, and develop differentiated strategies targeting underserved segments like mid-market sponsorless lending and infrastructure debt.