China’s outbound investments to drive demand for private credit, ADM Capital founder says
- Chinese companies seeking to expand overseas and Asian enterprises with ESG potential hold a lot of promise for private credit providers, ADM Capital founder says
- Chinese firms’ overseas mergers and acquisitions value rose 20 per cent to US$39.8 billion in 2023, according to EY
ADM Capital, a Hong Kong-based private credit manager with US$2 billion in assets, sees opportunities for non-bank capital providers to fill the financing gap, particularly Chinese companies seeking outbound investments and Asian enterprises with environmental, social and governance (ESG) potential.
“We’re seeing a lot of interest from Chinese companies diversifying manufacturing or increasing distribution in markets outside China,” said founding partner Christopher Botsford. “China outbound holds a lot of growth potential for mid-market private credit providers.”
Chinese companies that cannot get funding from local banks because of the complexities of cross-border transactions are turning to private credit lenders like ADM Capital for funding, he said.
Once a borrower is established in the offshore market, local banks could step in to refinance the loan, allowing the original private credit lender to exit.
While China’s overall outbound direct investment increased 0.9 per cent year on year to US$147.9 billion in 2023, Chinese firms’ overseas mergers and acquisitions (M&A) value rose 20 per cent to US$39.8 billion, according to an EY report.