The Payout Summary

Private credit continues to demonstrate robust growth globally, with significant capital raises and strategic deployments, particularly across Asia-Pacific and the Middle East. The surge in fundraising by firms like Granite Asia and SC Lowy—backed by major institutional investors such as Temasek, Khazanah, and Indonesia Investment Authority—underlines strong confidence in the sector’s growth potential. This influx of capital is closely tied to expanding direct lending and supply chain financing initiatives, notably supporting SMEs and corporate borrowers in emerging markets like India, South Korea, and the UAE.

Simultaneously, shifting regulatory landscapes are intensifying competition and altering risk profiles within private credit markets. In India, eased restrictions and banks’ growing appetite to deploy acquisition financing are positioning private credit as a more competitive, less costly alternative, while regulatory scrutiny is mounting in regions such as the UK and the US. The Bank of England’s stress tests and calls from policymakers like Senator Elizabeth Warren signal increasing oversight driven by recent bankruptcies, which may tighten operating conditions and influence investor risk tolerance moving forward.

Investors are also recalibrating strategies amid evolving credit dynamics and growing demand from institutional allocators, including pension funds, insurers, and sovereign wealth funds. The broadening access to private markets through strategic partnerships—such as Invesco and LGT Capital Partners—and Blackstone’s focus on retirement funds highlight a democratization trend, potentially expanding private credit’s investor base. However, caution is advised as warnings about inflated credit ratings and underlying risks underscore the need for vigilant credit risk assessment in portfolio construction.

Looking ahead to 2026, leaders like Temasek’s CEO emphasize the attractive risk-reward profiles of private credit alongside core-plus infrastructure, suggesting these asset classes may offer stable yield and diversification benefits amid macroeconomic uncertainty. For institutional investors and asset managers, adapting to these shifts will be key to capitalizing on opportunities while managing regulatory and credit risks inherent in a maturing private credit market.