Gemcorp Capital and Alpha FMC Launch Landmark White Paper

<p>London,<strong>&nbsp;</strong>Gemcorp Capital, a global asset management firm specialising in emerging markets, in partnership with leading global financial services consultancy Alpha Financial Markets Consulting (Alpha FMC), has published a major white paper titled “<em>Unmasking the Potential: Navigating Opportunities, Myths and Strategies in EM Private Credit</em>”.&nbsp;</p><p>Backed by proprietary survey data from 75 global institutional investors including sovereign wealth funds, endowments, family offices, pension funds, and development finance institutions, the paper sheds light on a severely underpenetrated but rapidly evolving asset class.</p><p>The white paper explores the persistent misconceptions that have constrained capital flows into the asset class, challenging assumptions around risk, enforceability, and returns, while making a data-driven case for why emerging markets (“EM”) private credit offers one of the most compelling opportunities in global finance today.</p><p>While private credit has grown nearly tenfold since 2008, reaching an estimated $1.8 trillion in AUM by 2024, less than 10% of that capital is allocated to emerging markets, despite EM economies accounting for 90% of the global population and over 50% of global GDP.&nbsp;</p><p>This underallocation persists even though our survey shows that investors increasingly&nbsp;recognise the stronger risk-return profile in EM private credit over developed markets (“DM”). 73% of survey respondents cited general portfolio diversification as their primary motivation for allocating to EM private credit, followed by short-term opportunism and economic trends favouring the asset class, both at 57%. In fact, 90% of survey respondents said they would be either increasing their allocation to EM Private Credit or keeping it stable over the next 5 years.</p><p>When asked overall what would drive them to increase allocations to EM private credit, stronger risk-adjusted returns (cited by 71% of respondents) featured as the most prominent answer among allocators, followed by improved political and economic stability (67%).&nbsp;</p><p>When comparing asset classes in EM, the data tells a compelling story: EM private credit has delivered gross internal rates of return (IRRs) exceeding 10–15% over the past five years, outperforming regional private equity benchmarks such as the Africa PE &amp; VC Index (+5.6%), the LatAm PE &amp; VC Index (+8.4%), and the Middle East PE &amp; VC Index (+11.2%). The returns are underpinned by contractually defined repayment schedules and amortisation features, which offer stable cashflows amidst uncertain market conditions.</p><p>Concerns over default risk are also shown to be misinformed. A review of 15,000 EM private credit loans from the GEMs database revealed an average default rate of just 3.6% – lower than the 4.0% seen in Moody’s global corporate “B3” rated debt, and only marginally above S&amp;P’s “B”-rated entities at 3.3%. Moreover, 72% of the value of defaulted EM loans was recovered – matching global loan benchmarks and significantly outperforming EM bond recovery rates.&nbsp;</p><p><strong>Felipe Berliner, Co-Founder and Head of Structuring at Gemcorp Capital,&nbsp;</strong>commented:</p><p>“Too many investors still view EM private credit through a distorted lens. The reality is a market with solid legal frameworks, low correlation to global credit cycles, and an attractive risk-return profile. The data in this paper challenges outdated narratives and shows why EM private credit should be a core part of future allocation strategies. As global allocators face saturation in developed markets and rising geopolitical fragmentation, EM private credit stands out as one of the few scalable, overlooked avenues for generating real yield in a crowded market.”</p><p><strong>Max van Baasbank, Director, Strategy &amp; Deals at Alpha FMC,&nbsp;</strong>said:</p><p>“Our survey reveals a clear disconnect between perception and reality in Emerging Markets Private Credit. While concerns about FX risk and contract enforceability remain common, we find these risks are frequently overstated and can be effectively managed. With rapid economic growth and constrained capital supply, EM Private Credit stands out as an attractive source of diversification and compelling risk-adjusted returns. This is an ideal time for investors to look beyond long-held assumptions and consider the potential of this asset class ".</p><p>For media enquiries, please contact:</p><p><strong>DGA Group</strong></p><p><a href="mailto:gemcorp@dgagroup.com">gemcorp@dgagroup.com</a></p><p><strong>About Gemcorp Capital</strong></p><p>The Gemcorp Capital Group is a global asset management business focused on emerging markets. It provides funding solutions to sovereign and corporate borrowers across a diverse range of sectors including technology, infrastructure and energy and structured trade finance. Gemcorp Capital has a well-established private credit platform, completing transactions in global emerging markets, from the Middle East and sub-Saharan Africa to South America, Southeast Asia and Eastern Europe.</p><p><strong>About Alpha FMC</strong></p><p>Alpha Financial Markets Consulting is a leading global consultancy to the financial services industry. Alpha combines highly specialist sector-focused strategy, management consulting and technology expertise to support the client transformation lifecycle. Founded in 2003, it now has over 1,180 consultants across North America, UK, Europe, MENA and APAC.</p><p>To learn more, visit:<a href="https://alphafmc.com/"> www.alphafmc.com</a></p>