Bloomberg, by Megawati Wijaya
A unit of Singapore’s state-owned investor Temasek Holdings Pte. has raised $1.3 billion for its second private credit fund, in a sign that Asia’s fledgling direct lending industry remains attractive to investors hungry for yield and asset diversification.
SeaTown Holdings International completed the fundraising for its SeaTown Private Credit Fund II, backed by a group of limited partners including insurers, endowments, and family offices, the alternative investment firm said in a statement. The new fund also received support from an unspecified Middle Eastern institutional investor.
With the $1.2 billion secured for SeaTown Private Credit Fund I, the firm’s private credit strategy now oversees more than $2.5 billion in assets under management, the statement said.
The Singaporean firm’s funding success offers hope that the world’s $1.7 trillion private credit industry is slowly getting back on its feet after a slump earlier this year when the Federal Reserve maintained its tight policy stance amid sticky inflation. Now with the US central bank widely expected to reduce interest rates next month, direct lenders’ prospects have turned brighter, especially for those in Asia where growth has been faster given a low base.
Private debt fundraising in Asia Pacific reached $1 billion in the second quarter, up from $600 million between January and March, according to data provider Preqin Ltd. The improvement came after direct lending globally scraped the lowest level in any quarter since 2020 in the first three months of this year.
Read the full article here (subscription may be required): https://www.bloomberg.com/news/articles/2024-08-27/temasek-s-private-credit-arm-raises-1-3-billion-for-new-fund
The Business Times, by Joan Ng
Increased activity in Asia-Pacific’s private markets is creating an attractive career pathway for investment bankers, public equity managers and other finance professionals.
This trend is also generating demand for training, and pushing managers to adopt proactive talent management policies.
Our Managing Director for Private Capital, Dickson Loo, told The Business Times’ Joan Ng that the attraction of capital to the Asia-Pacific region is a major talent draw. “We have seen many overseas graduates and professionals returning to their home markets in Southeast Asia due to the potential of the different markets and investors’ interest in this region,” Dickson said.
SeaTown is dedicated to in-house training to ensure our team has the right foundation, approach, philosophy, and culture. Our commitment to fostering the next generation of leaders is exemplified by the SeaTown Sustainability Scholarship with Singapore Management University, offering a grant and an internship to sustainability majors.
Read the full article here (subscription may be required): https://www.businesstimes.com.sg/companies-markets/asias-rising-private-markets-create-demand-training-talents-seeking-edge
AsianInvestor, by Nishtha Asthana
Private credit continues to be in favor as central banks go slow on rate cuts, while rising risks and evolving strategies come into focus.
“In the Asia-Pacific market, we see private credit delivering steady mid-teens returns to investors over the longer term. This is considerably higher vis-à-vis the long term returns of public equities or bonds.”, says Eddie Ong, our Deputy CIO and Managing Director for Private Investments.
Eddie recently discussed the rising appeal of Asia’s private credit market with Nishtha Asthana at AsianInvestor.
SeaTown is seeing an increasing interest in a performing Asian private credit strategy from global investors who have traditionally deployed in developed market credit strategies.
“Given that Asia private credit AUM (assets under management) is less than $100 billion, we believe there is significant growth potential,” noted Eddie. On risks surrounding the asset class, he shared that “with its customised deal structures, assessment must look beyond simple leverage or debt service coverage ratios” and that “downside protection mechanisms and third-party guarantees are crucial in determining creditworthiness”.
Read the full article here (subscription may be required): https://www.asianinvestor.net/article/asia-private-credit-lures-global-investors-amid-risk-concerns/496934
The Business Times, by Joan Ng
Investors are showing a preference for managers with a pan-Asia focus, as reported by Joan Ng of The Business Times.
Our Deputy CIO for Private Investments, Eddie Ong shared that success in Southeast Asia requires taking a strategic approach that is tailored to the unique opportunities of the region.
Given the region’s composition of “nuanced and fragmented” economies, managers need to work on building up smaller companies and developing M&A strategies that grow their size through horizontal and/or vertical integration.
SeaTown continues to have an optimistic outlook on the region and the opportunities it presents.
“With the valuation gap between developed markets and Southeast Asia continuing to widen, we think, at some point, we will see the financial performance of companies in the region drive valuations to play catch-up, and a further boost could also come as China recovers and investors get excited again.”, Eddie says.
Read more here > https://www.businesstimes.com.sg/international/asean/few-exits-limited-investor-appetite-test-south-east-asias-pe-managers
AsianInvestor, by Nishtha Asthana
Our Deputy CIO and Managing Director for Private Investments, Eddie Ong shared his views on allocation trend towards private credit with AsianInvestor.
Asset owners may find private debt more attractive, where returns are high relative to the historical rate environment. In addition, gradual interest rate declines would benefit private debt generally.
We see clear trends of allocation of more capital towards private debt across global markets and institutional investor types compared to past portfolio compositions and a growing appetite for Asia private equity opportunities, given the depressed valuations relative to their developed market counterparts.
Private Debt Investor, by Claire Coe Smith
Our Deputy CIO and Managing Director for Private Investments, Eddie Ong, was featured in the Private Debt Investor April 2024 issue – the 18-page special report on Asia Pacific, where Claire Coe Smith covered the region’s private debt landscape.
Eddie gave his views on the attractive proposition of private credit in Southeast Asia for borrowers, as private credit investors step in as a viable alternative capital source to pressured public markets credit issuance in the region.
“Across Southeast Asia, we see equity market performance facing further uncertainty and downward pressure. This backdrop has meant companies preparing for an IPO continue to adjust their timelines for a public debut, favouring pushing it out by one to two years to ensure they can secure the best valuations. In the meantime, they require capital for growth, and that is where private credit becomes an attractive proposition. In addition, there are loans that need to be refinanced with no option of public market issuance, so borrowers are readily turning to the private market as a viable alternative capital source.”
https://www.privatedebtinvestor.com/download-the-april-2024-issue-of-private-debt-investor/
CityWire, by Cheryl Heng
Our Deputy CIO and Managing Director for Private Investments, Eddie Ong recently shared with Cheryl Heng of Citywire Asia, about the downside protection which Asia private credit structures can offer.
“In Asia, private credit structures are known for their high degree of customisation and proprietary nature compared to developed markets.
This customisation includes better covenants that align with the borrower’s cash-flow profile, improved collateral coverage and protection triggers.
This positions lenders more favourably when renegotiating terms in the event of deteriorating credit during the lending period.”
Private Debt Investor, by Claire Coe Smith
Our Deputy CIO and Managing Director for Private Investments, Eddie Ong was featured in the Private Debt Investor Asia Pacific November 2023 Report, which covers the trends and opportunities in the region’s private debt market.
Eddie had an insightful conversation with Claire Coe Smith of Private Debt Investor, where he discussed how to build a pan-Asian private credit strategy. He also talked about our ESG approach as Asian managers sharpen their ESG focus.
The report also includes a recap of the PDI APAC Forum 2023 in March, where our Managing Director for Private Credit, Chan Wei Hsien participated in a panel discussion sharing about the advantages of private credit over public bonds, citing the benefits of bespoke structures, covenants and collateral backing for investors seeking potentially better risk-adjusted returns.
https://www.privatedebtinvestor.com/download-pdis-2023-asia-pacific-report/
Private Debt Investor, by Andy Thomson
SeaTown Holdings International, an indirect wholly owned subsidiary of Singapore-based global investment company Temasek Holdings, has closed a private credit fund on $1.23 billion.
A spokesman for the firm said most of the commitments had come from Asia-Pacific-based investors. He added that some which didn’t commit were interested in coming into the next fund but wanted a longer feed-in time and to understand more about the proposition.
This fund is the first by SeaTown to have sought third-party capital, having primarily managed internal capital previously. Having set out to raise $200 million from limited partners, SeaTown ended up raising around $230 million from them over a six-month period. The fund…To continue reading, click here
DealStreetAsia, by Kristie Neo
Temasek-backed investment firm SeaTown Holdings has raised an additional $200 million for its private credit fund from Asian institutional investors, marking the first time it has secured capital from external investors.
Singapore state investor Temasek was previously the sole limited partner (LP) in the fund. SeaTown is a subsidiary of Seviora Holdings, a newly-formed entity combining Temasek’s four existing asset management companies – Azalea Investment Management, Fullerton Fund Management Company, InnoVen Capital, and SeaTown Holdings International.
The fundraising from external investors brings the total capital committed for SeaTown’s Asia Pacific-focused private credit fund to over $1.2 billion, according to Eddie Ong, deputy chief investment officer of SeaTown Holdings. The new money came from endowments, fund of funds and family offices in markets like Singapore and Malaysia.
To continue reading, click here.
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