French investment manager Tikehau Capital and UOB-Kay Hian (UOBKH) have launched a fresh private credit strategy for Asia Pacific where the partners will be contributing $50 million each in capital commitments.
The strategy aims to offer private debt financing to mid-sized companies in the region with a focus on growth, working capital, and refinancing deals in resilient and defensive sectors, according to a statement on Wednesday.
Tikehau declined to comment on the target for final capital commitment but stated that the strategy will involve accepting further funding from other limited partners. Its media representative mentioned in an email to DealStreetAsia that it will “have a size significantly larger than $100 million.”
“As Asian markets demonstrate continued robust growth and positive structural shifts, there is an ongoing demand among mid-market businesses in the region for funding to enhance working capital and refinance existing debts,” said Bruno de Pampelonne, Executive Chairman of Asia; and Jean-Baptiste Feat, co-head of Asia at Tikehau Capital.
“Our partnership with UOBKH will give Asian mid-market businesses access to alternative funding sources whilst simultaneously offering investors a unique opportunity to engage with private credit as an investment class,” they added.
The €43.2-billion French asset manager will leverage its global institutional clients and track record in the private credit sector while benefiting from UOBKH’s deep local networks in its sourcing and diligence channels, the statement read.
The partnership comes as traditional financial institutions around the world are diving headfirst to grab a slice of the $1.7-trillion private credit market, a growing sector of alternative investments that took off following the Great Financial Crisis.
Amid favourable market conditions where interest rates remain high for private lenders, Singaporean bank DBS Bank also backed Muzinich & Co’s $500-million debut private credit vehicle last July.
Earlier this month, DealStreetAsia reported that Tikehau had tapped a former managing director at BPEA Credit as head of private debt for Asia to join the group’s private debt platform, which manages 17 billion euros in capital.
Last December, Paris-headquartered Tikehau Capital announced that it was in advanced talks to sell its equity stake to Nikko Asset Management and form partnership projects. Tikehau Capital Advisors, Tikehau Capital’s majority shareholder, is also backed by SFI, MACSF, Morgan Stanley, and Singapore’s Temasek.
That same month, Pegasus Asia, Tikehau’s S$170-million Singapore-listed SPAC, said that it would cease operations and wind up its business due to macroeconomic and market conditions.
Tikehau’s investment activities in Asia have spanned a range of strategies in recent years. The firm, which has been operating in Asia for a decade, led a $5-million round in fintech startup Helicap in 2022, a year after buying a majority stake in Asia-focused secondary firm Foundation Private Equity.
In 2020, it also increased its stake in Singapore-listed IREIT Global, which has underlying European real estate assets.