Blackstone targets $5 billion for private credit business in Asia
(Bloomberg) — Blackstone Inc. is seeking. to increase its assets tenfold in its own credit business in the Asia Pacific region to take advantage of a market with a growing appetite for such financing.
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The US alternative asset manager aims to expand its own credit assets to at least $5 billion in the “near term” from the $500 million committed in the fourth quarter of last year, said Paulo Eben, who heads operations in Europe and Asia. – Pacific. Blackstone Credit began investing actively in the region in 2021.
While Asia makes up only a small portion of the global private credit market, Blackstone is betting that demand will increase as companies in the region increasingly seek to diversify debt financing away from bank loans.
“Emerging private bond markets in Asia are set to rally due to the accelerated growth in private equity activities,” Eben said in an interview. “There is a huge opportunity for Blackstone Credit to contribute to the underserved Asian private debt market and address the growing demand for financing.”
Eapen wants Blackstone’s credit business in Asia Pacific to be on a scale similar to its operations in Europe. As of the first quarter, Europe accounted for about 16% of the company’s $266 billion global credit and insurance business, while North America contributed more than 80%.
To do this, Blackstone Credit — one of the few private lenders that can provide more than $1 billion for a single transaction — is targeting large-scale transactions in high-growth sectors like life sciences and technology, Eben said. He said he is currently looking at six to eight deal opportunities in the region, without going into further details. A Blackstone spokesperson said the company will use global capital to fund the expansion.
Blackstone’s move comes as most of Asia’s economies reopen as the pandemic subsides, which could boost demand for financing. In addition, recent market volatility can present an opportunity for private funds as traditional capital declines. Other companies are jumping on the shopping cart, as KKR & Co recently announced that it has raised $1.1 billion for its first trust-focused investment fund in Asia, with a focus on Australia and Southeast Asia.
Although Asia has some of the world’s largest and fastest growing economies, the region’s private credit market remains largely untapped. This is partly due to domestic regulations on foreign investment in places such as India and China.
Strengthening its presence in the region, Blackstone Credit recently appointed Mark Glingary as Head of Asia Pacific to be based in Sydney. Glingary was previously the Managing Director of the London and Sydney offices of Anchorage Capital Group LLC.
Currently, private credit contributes about 23% to the $3.7 trillion sub-investment-grade US credit market, Glingary said, and Europe is following a similar upward trend.
“We expect the Asian private credit market to grow significantly over the next five years,” he added.
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