As we ease into a new norm, investors are prioritising speciality and distress private/alternative credit to distressed businesses to help support the economy, keep businesses afloat, save jobs while sustaining value resilience. This is not surprising since private/alternative credit has established itself as an essential source of finance for the real economy. Its wide-ranging strategies amongst lenders and borrowers have proven a vital tool for economic development, innovation and growth.
Across emerging and frontier markets where growth enterprises are either unserved or underserved in terms of access to growth capital, the constraint to growth credit has ushered in credit strategies that give investors access to under-researched, less efficient and more profitable opportunities.
However, investing in private credit comes with challenges that regulators, investors, managers, borrowers and advisors must confront. One that requires dialogues on what private credit in the emerging and frontier markets context means, the trends driving it’s the development, the sustainability of the asset class and how private credit can be put to work efficiently and effectively.