Hong Kong’s talent base lends expertise to rapidly growing Asian private credit market, APLMA CEO says
- Hong Kong’s sophisticated pool of banks, NBFIs and legal advisers contributes to a vibrant regional private credit market, says new chief of Asia-Pacific loan market body
- The region’s assets under management in private credit increased more than 3.5 times in the last decade to US$81.3 billion in 2022, says data provider Preqin
Hong Kong’s sophisticated investor base is bringing lending expertise to Asia’s private credit market, giving further impetus to the rapidly growing asset class, according to the new head of the regional industry body, the Asia-Pacific Loan Market Association.
The region’s assets under management in private credit have increased more than 3.5 times in the last decade, to US$81.3 billion in 2022, according to data provider Preqin, but still account for only 5.5 per cent of the global tally, indicating the growth potential.
The strong growth pace has attracted private-equity firms, asset managers, family offices, and banks, many of whom are members of the APLMA, an industry group that provides template documents and guidance notes for the loan market.
“In Hong Kong, we are blessed with quality and sophisticated market participants – whether they be banks, nonbank financial institutions [NBFIs], or legal advisers – which contribute to an increasingly vibrant private credit market,” James Hogan, CEO of the association, said in an interview with the Post. “Many other regional markets will be keen to follow some of the trends in Hong Kong and Greater China.”
Hogan, a 32-year HSBC veteran who joined the APLMA at the start of this year, said private credit funds and banks collaborate with and complement each other in Asia, where banks have long dominated lending.
“Banks have traditionally been the biggest providers of working capital and finance liquidity,” said Hogan. “But banks cannot do everything. Having an alternative provider of credit is very healthy.”