Singapore-based Crossinvest Asia is expanding its private assets platform to include opportunities from the $67 trillion global private debt market, Citywire Asia can exclusively reveal.
The Private Access platform was launched last May with the goal to make 20-25 globally diversified, digitalisation-related private equity investments by 2020.
After making two private equity investments in the last eight months, Crossinvest now wants to expand the offering to private debt.
‘Private credit [also] needs to be something that should in client portfolios. We are already talking to a few people in terms of the origination and the investment methodologies,’ Rohit Bhuta, Crossinvest’s CEO told Citywire Asia on the sidelines of an event.
The independent asset manager (IAM) has partnered with Australian consultancy Revolver Capital for both its private equity and private debt offerings. While it analyses private equity opportunities on a deal-by-deal basis, the IAM will invest in private debt via fund managers.
Aside from being early stage, managers should have been through market cycles and done workouts, added Craig Swanger, chief investment officer of Revolver Capital.
He said the managers should also have good origination networks and know how to source deals.
‘Some of the best people are actually ex-bankers because funnily enough, they’ll go back to their colleagues who are still at the bank and say. I know you can’t put it on your balance sheet so you find the loan and we’ll take them off you,’ he explained.
While property and traditional fixed income make up a majority of the average Asian high-net-worth portfolio, Swanger said that expensive equity valuations and rising interest rates are encouraging a move into private debt. Returns can be anywhere between 8% and 12%, net of fees.
However, credit risk is one of the key risks when investing in private debt, so the firm is looking for opportunities in Asian countries with a relatively safer regulatory environment such as Hong Kong, India, Singapore and Vietnam.
‘Contract law is very strong so you’re actually going to get repaid,’ he said.