More family offices are turning to Asia-Pacific private credit: Lighthouse Canton
Low penetration of private debt in region offers investors an opportunity
Family offices in Asia-Pacific are increasingly allocating more capital to private credit, according to Sanket Sinha, CEO of Lighthouse Canton. Over the past three years, family offices' share of Asia-Pacific private credit assets under management has risen from around 23-24% to nearly 30%. Lighthouse Canton, a global wealth manager for domestic Asian families, is seeing more family offices interested in participating in global growth and exploring private-market opportunities.
The region's private-credit penetration is only around 5-10% of global gross domestic product, compared to a much higher ratio in the US and Europe. The low penetration is attributed to the lack of sponsored private credit deals and fragmented markets. However, this fragmentation also presents an opportunity for investors to capitalize on it by changing their strategies and right-sizing their allocation to each market.
Investors should consider markets like India, Australia, and Japan, which have strong deal flow and strong security structures. Institutional investors and family offices are becoming more stringent in their evaluation of direct investments by conducting thorough due diligence, similar to large institutions. This trend is accelerating as wealth passes to the second and third generations, with more family offices being established to handle wealth.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
