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The case for private credit in emerging markets
['Funds Europe']
Funds Europe
At a time when cracks are appearing in mainstream private credit, emerging market private credit strategies can offer valuable diversification opportunities, resilience and impact, against a backdrop of higher economic growth and less saturated investment markets.
A lower-risk class of borrowerIn both developed and emerging markets, private credit fills a gap in the financial system.
The blended finance boostBy identifying attractive credits in overlooked markets, investors can generate similar risk-adjusted returns in emerging markets than can be found in developed markets.
Boots on the groundCertainly, it is difficult – if not impossible – to successfully deploy private credit to emerging markets from a desk in London or New York.
At a time when traditional private credit might be starting to hit its limits in developed economies, emerging markets strategies open new doors and present valuable new opportunities.