💼 Brief Take: Asia Private Credit’s Growing Pains
Private credit plays a role in Asia’s financing landscape, but investors also have to go into it with their eyes wide open.
While fractures in US private credit shouldn’t be extrapolated to Asia, the exuberance has reached new heights in markets like India.
The growing calls for disclosures and client education in the region should not be labelled as noise.
Some of Asia’s private credit firms are mulling changes to the industry, including longer lock-up periods and higher redemption caps, after turmoil in the US increased scrutiny from investors and regulators across the region, Bloomberg reported on 20 April 2026.
Eveline’s Take
I wrote five months ago that private credit can provide an additional financing option, but the emergence of this asset class in Asia doesn’t remove its structural shortcomings: the weaker credit quality of some borrowers and the challenges of enforcing the loans in certain jurisdictions.
I also noted on 9 December 2025 that private credit tends to be more opaque and tightly held, so it may take a while – if at all – for a secondary market to develop. In short, the illiquidity of private credit means that investors could be stuck holding the bag without an exit path.
An opinion piece pointed out that “private credit is neither a novelty nor a monolith” and “sweeping claims of systemic fragility” are not backed by evidence. Others say that the main issue in the US is a mismatch between investor expectations and liquidity conditions, not the underlying fundamentals.
It’s true that fractures in US private credit shouldn’t be extrapolated to the diverse Asia Pacific markets. Some funds operating in this region are also closed-ended, meaning that these investors may not be able to pull their money out as easily as in the US.
However, private credit exuberance has reached new heights in India, where some lenders structured a step-up in pricing to a whopping 21.75% for Shapoorji Pallonji Group (SP Group). I wrote on 29 November 2025 that SP Group’s lenders were probably hoping to repeat the success of Indian mining conglomerate Vedanta Resources, which was able to reopen access to the bond markets for refinancing.
The problem with SP Group is that its key asset is an illiquid stake in Tata Sons, the holding company of Tata Group, and potential monetization would require an alignment of local regulations, financial calculations and prominent personalities. In short, it’s a jackpot event that’s treated by some lenders as if it’s a probable reality.
Early signs of stress are emerging in a handful of private credit transactions in India, although such developments rarely become public because the funds are not required to disclose asset-level performance, The Economic Times reported on 18 March 2026.
Cracks are also starting to appear in other markets. A BlackRock private credit fund in Asia has suffered the first default by a borrower in its portfolio, after Chinese cold-chain infrastructure service provider Metcold Holdings failed to repay a loan, Bloomberg reported on 14 April 2026.
Private credit lenders who want to enforce their defaulted loans in Indonesia are also in for a long, hard slog with uncertain recovery, as shown in the cases of shopping mall operator Supermal Karawaci and the Bakrie Group’s media arm Visi Media Asia.
It’s not all doom and gloom, as CapitaLand Investment (CLI) managed to raise USD 320 million for its second regional fund focusing on real estate credit. “Institutional demand for flexible, asset-backed capital solutions in APAC remains strong as banks continue to tighten lending,” CLI said in its LinkedIn post last week.
Private credit has a role to play in Asia’s financing landscape, which is becoming more mature and diverse. However, the growing calls for disclosures and client education should not be labelled as noise, as investors have to go into this with their eyes wide open.
Acrostics Asia Coverage
Acrostics Asia is an independent Asia credit intelligence provider that takes end-to-end ownership of its signals – from origination to production and distribution.