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January 2024 Newsletter

The collapse of several US regional banks in spring offered a warning of a deleveraging, contractionary credit environment. However, by autumn, the market narrative had shifted towards growth, and surging long-dated rates, before the year end saw markets rally and bond yields fall on the prospect of US interest rate cuts as inflation continued to move towards target ahead of schedule.

In this Newsletter we discuss on what the growth of global Private Credit means for the asset class in the APAC region

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July 2023 Newsletter

Asia has experienced strong growth within the Private Credit asset class in the last 20 years. Within it, South East Asia is the largest sub-allocation regarding global capital allocation and offers some of Asia-Pacific's most compelling near-term opportunities. 

In this Newsletter we discuss why ASEAN may be the brightest spot in APAC Private Credit right now

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January 2023 Newsletter

While risk and growth assets have got off to a flying start in 2023, we are sceptical that such buoyancy can be maintained in the face of the dramatic rise in borrowing costs witnessed in 2022. This is especially because of the amount of debt stock there is outstanding in the world today.

In this Newsletter we discuss how higher borrowing rates are changing the game for Asia-Pacific Private Credit 

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Rahul Kotwal interviewed by Emerging Markets Alternatives, LLC

Rahul Kotwal, Founder and Managing Partner of Zerobridge, gives an in-depth interview to Kamal Suppal of Emerging Market Alternatives

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June 2022- India Newsletter


Most investors see APAC as a growth region, driven by its emerging markets. India is expected to be one of the fastest growing economies in the emerging markets re-affirming its position as the second largest emerging economy after China


In this Newsletter we discuss the opportunities in India for private credit


April 2022 Newsletter


We'd planned to write about something different for our ninth newsletter, but the world changed on 24 February. It's impossible to ignore the fact that Europe is experiencing its largest land war since 1944. Our first thoughts must always be with the innocent victims of the conflict, primarily the people of Ukraine.


In this Newsletter we discuss the impact of the Russian invasion of the Ukraine on private credit risk

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January 2022 Newsletter


The themes we discussed last year - COVID, inflation, real rates, ESG and regulatory policy - remain key portfolio construction factors for private credit managers in APAC. Yet 2022 is not just “2020: Season Three”. We also see divergences emerging which we expect will define 2022. Perhaps the transition is best summed up by that staple phrase of SE Asian English, “same same but different.”  


In this Newsletter we discuss our key themes for APAC Private Credit in 2022 


November 2021 Newsletter


The market has been struggling with whether higher US (and global) inflation will be “transitory” vs. “persistent”. The underlying numbers suggest that inflation is getting broader and stickier, but what does it mean for your portfolio?


In this Newsletter we discuss the risk of persistent higher inflation to fixed income assets and ask whether APAC private debt could be a buffer against negative real yields and negative convexity

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September 2021 Newsletter


China Evergrande Group is one of the country's largest property developers. Its expansion has been financed primarily through debt, and the group is understood to carry around US$300 billion in liabilities. But, do Evergrande's troubles impact Asian alternative credit more broadly?


In this newsletter we assess the impact on the asset class in relationship with the situation of the developer

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July 2021 Newsletter


The global economy continued to rebound in the first half of 2021 with the acceleration of the COVID-19 vaccination pace, but is it too early to to call victory against the pandemic? 


In this newsletter we assess the regional divergences and the risks of "Long COVID", with a special focus on the impact it may have on the APAC private credit markets.


June 2021 Newsletter


A classic model for understanding portfolio construction is Grinold and Kahn's "Fundamental Law of Active Management" ("FLOAM"), which expresses the risk-adjusted value added by a portfolio manager (information ratio, or"IR") as a function of:

  • Forecasting skill (information coefficient, "IC")

  • Number of markets to which it can be applied (breadth, "BR") and

  • Ability to implement views (transfer coefficient, "TC")


In this newsletter we use the model to illustrate how these three components impact APAC private credit portfolios. 


April 2021 | The Workout


Why are expected IRRs in APAC substantially higher than the US or Europe (15% gross, unlevered versus 7-10%). Does this imply that APAC is riskier than other markets?


The analysis and accompanying data suggests that this is not the case:

  • Structures & covenants are more conservative and tenors are shorter

  • Proxies for default and LGD rates imply similar risk to the US & Europe

  • Higher returns are a function of greater fragmentation and complexity

  • Unlike the US or Europe, capital is not chasing deals – rather there is a lack of supply of private debt capital

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March 2021 Newsletter

Environmental, social and governance (“ESG”) may define this decade in the investment industry as much as monetarism or quantitative easing has previous eras. 

But definitions are still fluid across multiple asset classes. In this Newsletter we want to examine the merits of top-down and bottom-up approaches to integrating ESG at the total portfolio level and the implications that these perspectives have for private debt financing in Asia-Pacific.

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February 2021 Newsletter

The first quarter of each year sees institutional investors  rebalance and reinvest last year’s gains into more attractively valued or diversifying positions. 2021 begins with investor risk appetite at high levels, driven by hopes that vaccines and stimulus will lead to the recovery and normalisation of economic activity. This year, the challenge is finding opportunities which offer genuine value and diversification.

In this Newsletter, we examine these strategies and consider how Asian private debt might complement and enhance portfolio construction options.


December 2020 Newsletter

In our inaugural newsletter we begin to address many of the facts, misconceptions and aspirations of the Asian private credit asset class.  In this edition we discuss:

1. Thematic Focus – A four trillion-dollar funding gap

2. Market Insight – Covenants: The best a loan can get

3. News Centre – Links to several articles and white papers we found interesting

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