EMs are in for a record year in private credit

Emerging markets (EM) are on track for their biggest year yet in private credit, Bloomberg reports. Global lenders including Blackstone, Apollo, KKR, and Ares deployed USD 11.7 bn in 1H 2025 — nearly matching last year’s total of USD 13.9 bn — putting the asset class on course for a record, the business news information service reports, citing the Global Private Capital Association.

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Funds are looking to pivot away from their long-standing reliance on US assets as a way to diversify allocations. EM-based firms, meanwhile, are drawn to the flexibility and confidentiality offered by private lenders, though often at a higher cost than public debt.

India has led the surge, with Prime Minister Narendra Modi’s infrastructure push fueling demand for capital for projects ranging from solar plants to roads. Elsewhere, Romania’s sports gaming platform Superbet alone secured EUR 1.3 bn from Blackstone and HPS, while Southeast Asia logged USD 1.1 bn in transactions.

Despite this, private credit in EMs still makes up less than 10% of the USD 1.7 tn global market, with some lenders viewing them as too risk-prone. Momentum is nevertheless building as investors chase diversification and higher returns, with inflows into public markets boosting confidence. EM equities are up 23% YTD, while hard-currency bonds have gained nearly 9%. “It’s still at a relatively early phase compared to the US […] but in general we do see it growing,” said Jeff Schlapinski of the Global Private Capital Association.

Most transactions are also on the smaller side, with the majority in the tens of mns of USD, and volumes accounting for only a fraction of most corporates’ debt books, with bank lending and public debt markets still accounting for the majority.

However, regional players are giving the market a boost, enabling bigger transactions and larger fundraisings. India’s EAAA India Alternatives raised USD 510 mn for its first private credit vehicle, while in the Gulf, Saudi’s Public Investment Fund recently agreed to anchor new Goldman Sachs funds targeting private credit and public equity across the GCC. In the UAE, Mubadala grew its private credit portfolio to USD 20 bn last year.

It’s a big year for private credit more in general: Wealthy individuals poured USD 48 bn into US private credit funds in 1H 2025 — surpassing last year’s total — even as institutional demand waned. Policy tailwinds are helping, with Trump signing an executive order in August opening 401ks to private assets. Evergreen debt funds in Europe also more than doubled y-o-y.

MARKETS THIS MORNING-

Asian markets are mixed this morning, with mainland China’s CSI 300 flat at the open after China’s latest manufacturing data showed the sector contracting for a sixth straight month. Japan’s Nikkei fell 0.1%, while South Korea’s Kospi was also flat. Hong Kong’s Hang Seng was the only outlier, rising nearly 0.5%.

Over on Wall Street, futures have only marginally dipped, with stocks set to close out September on an unusually high note following the rebound of AI stocks yesterday.

THE CLOSING BELL-

The DFM rose 0.2% yesterday on turnover of AED 715.4 mn. The index is up 13.5% YTD.

In the green: National Industries Group Holding (+5.1%), National International Holding Company (+3.7%) and Al Mal Capital REIT (+3.5%).

In the red: National General Ins. (-8.2%), Chimera S&P UAE UCITS ETF — Share Class A — Accumulating (-3.5%) and Agility The Public Warehousing Company (-3.4%).

Over on the ADX, the index fell 0.1% on turnover of AED 937 mn. Meanwhile, Nasdaq Dubai was down 0.2%.