Tikehau Capital, the global alternative asset management group, has joined forces with Singapore-based brokerage firm UOB-Kay Hian (UOBKH), to launch a new private credit strategy.

The duo said in a statement on Wednesday that both sponsors will be contributing $50 million each in capital commitments to the strategy, demonstrating strong alignment of interest with investor clients.

According to the statement, this new private credit strategy seeks to provide financing to mid-sized corporates across Asia Pacific.

The focus will be on growth, working capital, and refinancing lending to borrowers in resilient and defensive industries.

The statement also noted that Tikehau Capital’s strong global institutional relationships and extensive track record in the private credit space, combined with UOBKH’s deep local networks, allow the new private credit strategy to tap on a unique nexus of sourcing and diligence channels.

This strategic collaboration is also in line with Tikehau Capital’s strategy to continue to expand its global footprint, particularly across Asia, deepening its presence in a region where it has ten years of operating history.

Cited data from the International Monetary Fund and Preqin Pro (2023), the statement said Asia’s allocation to private credit remains under-represented.

Compared to Asia’s 36 percent contribution to global gross domestic product (GDP), Asia comprises only 7 percent of global private credit assets under management, representing significant scope for growth of the private credit market in Asia.

“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 Antoine Flamarion and Mathieu Chabran, Co-founders of Tikehau Capital.

According to them, the 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.

Bruno de Pampelonne, Executive Chairman of Asia, and Jean-Baptiste Feat, co-head of Asia at Tikehau Capital added the partnership represents an important step forward in their development in Asia.

“We look forward to the potential synergies that our combined strengths will unlock in pioneering this private credit initiative and believe that this will enable us to effectively tap into the burgeoning demand for private debt amongst Asia’s mid-sized enterprises,” he said.

Wee Ee Chao, Chairman and Managing Director of UOB-Kay Hian, commented they are delighted to partner with Tikehau Capital, a global alternative asset manager whose growth and success have been remarkable.

“We truly appreciate this partnership and commitment as we embark on this journey together in leveraging the strength of our franchises to grow the Asia Pacific private credit fund strategy,” he added.

Listed in France, Tikehau Capital is a global alternative asset management group with €43.2 billion ($46.73 billion) of assets under management.

The firm has developed a wide range of expertise across four asset classes (private debt, real assets, private equity and capital markets strategies) as well as multi-asset and special opportunities strategies.

Backed by the UOB Group and listed on Singapore bourse, UOB-Kay Hian is a brokerage firm that is supported by more than 3,000 professionals and 80 branches worldwide including a growing network of offices across Southeast Asia, Greater China, the United Kingdom and North America.

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