BlackRock launches first Asia private credit fund – exclusive

The firm says it is seeing interesting opportunities in countries including India, Indonesia and Australia in particular.

BlackRock is seeking to raise a minimum of $300 million and a maximum of $500 million for its first Asian private credit fund.

Asia-Pacific Private Credit Opportunities Fund I was launched last month. The Pan-Asia fund will focus mainly on senior secured lending in the mid-market and will opportunistically invest in stressed deals in selected countries. It targets low- to high-teen returns with a typical deal size between $20 million to $50 million, according to market sources.

The fund, which started pre-marketing at the end of last year, will be co-managed by Neeraj Seth, head of Asian fixed income at BlackRock, and Justin Ferrier, a managing director.

BlackRock declined to comment on the fund details.

“I think in terms of growth in the space, we continue to see very interesting investment opportunities across the region or more specifically in countries like India, Indonesia and Australia where the restructuring of the banking system continues,” Seth said of market opportunities in Asia during an interview with PDI previously.

To strengthen the manager’s presence in the private credit space in Asia, the firm hired Singapore-based Ferrier last year to overlook the mid-market and special-situations investments in the region.

Seth also told PDI that the firm’s Asia private credit platform has been actively investing. In February, it arranged sole financing for India’s Global Sports Commerce (GSC) and its affiliate Techfront International, a supplier of in-stadium LED screens, to acquire Screencorp in Australia and Oled & Carnegie in New Zealand.

“You have seen some regional niche players and some of the global players looking at the space. I would say the competitive landscape is still evolving but it is not very intense,” Seth noted.

With global investors chasing yield, Asian private credit has started to attract more interest from both local and international investment managers. Bain Capital Credit launched its first $1 billion Asia-focused special credit fund in February this year. Local asset manager, Hong-Kong based SSG Capital Management, corralled over $1 billion in total at the end of last year for a senior direct lending fund and special situation fund.

“As private credit is a long-term strategy, from an investor’s perspective, you do want that platform to still be there 10 years from now. Therefore, large asset managers like BlackRock have a big advantage in providing a stable platform,” Seth added.

BlackRock is a global leader in investment management, risk management and advisory services for institutional and retail clients. At March 31, 2017, BlackRock’s AUM was $5.4 trillion.