Chart of the week: China’s debt fundraising rollercoaster

Closed-ended private debt fundraising for the country has fluctuated wildly compared with the rest of Asia.

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The mounting debt problem faced by China is presenting opportunities for investors, according to the latest issue of Private Debt Investor. As Chinese debt opportunities become ever more appealing, PDI Research & Analytics looks to see how Chinese private debt fundraising compares with the rest of Asia.

Data suggests that China-focused private debt fundraising has been on a rollercoaster in recent years. Funds targeting opportunities in the country raised just $100 million in 2010 and fell a year later. Two subsequent years of growth then ended in 2014 – the year Chinese debt-to-GDP rocketed to 282 percent.

Asia (excluding China) has experienced its own fluctuations, albeit not as extreme. Fundraising for the region typically exceeded China until last year when China Communication Construction Company’s CCCC-NSSF Infrastructure Fund raised $2.4 billion, boosting the total for the country to $3.9 billion – surpassing the $2.7 billion raised for non-China Asia-focused funds, which attracted $710 million more than the previous year.  

So far this year, only one China-focused private debt vehicle has closed, Abax Asian Structured Credit Fund II, which attracted just under $70 million.

By contrast, investors appear to be focusing their capital on Indian debt, with $780 million amassed across two funds, Kotak India Realty Fund III and Kotak/CPPIB Indian Distressed Debt.