Unmasking the potential
<p>Our new report, “Unmasking the potential”, surveyed over 75 institutional investors from across the globe to collect their views on emerging market (EM) private credit. </p>
Navigating opportunities, myths and strategies in EM Private Credit
<p>Unmasking the Potential provides a thorough overview of the emerging market private credit asset class, fleshes out the opportunities and takes a deep dive into how the asset class is perceived by institutional investors -- and discusses why it is changing. The report also highlights commonly held misconceptions on emerging market private credit and shares our views on best investment practices in emerging markets and private credit. </p>
Highlights
<h3 class="header-container___otyzD">Poised for Growth <label for="input-rp692h" class="label___WET63" aria-disabled="false"><br class="Apple-interchange-newline"></label></h3><blockquote><p><strong><em>“EM Private Credit offers one of the most asymmetric risk-return opportunities globally, but only for those who understand how to navigate its complexity.”</em> </strong></p><p>- Investment Committee member, APAC insurer</p></blockquote><p>The emerging markets account for approximately 90% of the world’s population and generate half of the world’s GDP. With faster population growth rates and rapidly maturating economies, the emerging markets are forecast to make up nearly two-thirds of global GDP by 2035, with nine of the world’s top 20 economies currently categorised as emerging markets<sup>1</sup>. The opportunity is simply too extensive to ignore. </p><p>But despite rapid private credit growth in the developed world, less than 10% (about $150bn) of Private Credit AuM is invested in the emerging markets. There is a clear and vast unmet need for capital in emerging markets </p><p><img loading="lazy" src="/getContentAsset/e14e8ffb-f649-4bd2-a4dc-da24d560d409/cb87803a-320c-480f-ab75-7b9029eaaf79/Developed-markets-graph.png?language=en" alt="Developed markets - graph" title="Developed markets - graph" class="fr-fic fr-dii" style="width: 60%"></p><hr><p style="font-size: 14px"><sup>1</sup> Population data: UN Department of Economic and Social Affairs (2024) ‘World Population Prospects 2024 – Demographic indicators by region, subregion and country, annually for 1950-2100’; GDP data: World Bank (2024) ‘Data Catalogue, GDP Ranking’; Economy rankings: S&P Global (2024) ‘Emerging Markets: A Decisive Decade’ </p>