Key facts
- 42% of institutional investors plan to increase their emerging markets private credit allocations.
- These investors plan to boost allocations over the next two years.
- This investment could direct capital to developing countries.
- Private-credit borrower defaults have reached a record high.
- This record high is according to a Kroll Bond Rating Agency index.
- The Kroll Bond Rating Agency index has a three-year history.
- The private credit industry is valued at $1.8 trillion.
A significant portion of institutional investors, nearly half, are considering an increase in their private credit allocations to emerging markets. A survey conducted by emerging markets asset manager Gemcorp indicates that 42% of these investors plan to boost their investments in this sector within the next two years. This trend could channel much-needed capital into developing countries.
Conversely, the broader private credit market is facing considerable challenges. The default rate among private-credit borrowers has climbed to its highest level since the inception of a Kroll Bond Rating Agency index three years ago. This marks a record high and signals growing financial strain within the industry.