It is interesting to witness the current paradox afflicting global markets; the war in the Gulf has generated the worst energy crisis in recent memory alongside the travails that the world is facing – existential threat of climate change, rising budget deficits and government debts, unsustainable pensions, ageing population, negative impact of AI on employment markets … the list continues.
In the US, the world’s largest economy, consumer confidence has fallen dramatically and Asia’s developed and emerging countries including Korea, Vietnam, Pakistan, India, Thailand, the Philippines and Indonesia are now feeling the impact of the war. In Korea, a cash handout of about US$400 or more is to be distributed to about 70% of the population to help mitigate the burden of rising costs of food and fuel.
Amid all these, US equities continue to hit new highs since late February and other global markets have been attracting renewed interest. Meanwhile, gold – the last bastion of safety – slumped in price after scaling new peaks.
This conundrum has left analysts shaking their heads. Some are less sanguine and see a looming market crash. Talk of an AI bubble, meanwhile, is dominant and the scale of investments in software companies has been astronomical – prompting investors to pull out of private credit funds in the US last year.
Whether the issues facing the private credit markets are cyclical or structural (or both) remains to be seen, but fund allocators to the sector now expect single-digit returns compared to low double-digit returns not so long ago.
The private credit industry is, of course, just one part of the wider private markets universe; and private markets’ growth has been impressive in the past two decades, approaching US$20 trillion AUM, according to some estimates.
The ongoing focus on these markets is not surprising. According to a PwC report last year, profits from private markets mandates are four times more than that of traditional mandates per US$1 billion of AUM. The rising convergence of private and public markets will continue, given the current trends.
As Asia’s oldest trade journal, Asia Asset Management will continue to focus on these key developments and issues. This year, in recognition of the growth of private markets, we have included new categories in our annual Best of the Best Awards.
In this latest issue of the Awards Supplement, we feature some of the award winners. We extend our heartiest congratulations to all for their achievements.
Tan Lee Hock
Founder and Publisher
Asia Asset Management
