Blogs

In a recent PEI Private Credit article, Fi Dinh, our head of Fund Finance, APAC, shared her perspective on the fund finance market’s relationship-driven origins and emerging areas of opportunity across APAC.¹ Building on that discussion, Fi takes a closer look at this evolution for MUFG Alt Insider. Her three insights below explore its continued development and why APAC should not be viewed as a single, uniform market. 1. APAC fund finance has become more sophisticated and institutional, while retaining characteristics of its origins. Fund finance in APAC originated as relationship-based lending. Early liquidity was typically provided through relatively straightforward bilateral facilities with relationship banks and lighter documentation than is typical today. As global and local managers raised larger funds across APAC and international banks entered the market to diversify their portfolios, financing increasingly involved multiple lenders and more standardized documentation. NAV financing has deeper regional roots than some may realize, with early NAV-style financing often provided by family offices and boutique investment firms. 2. A borrower’s market requires disciplined underwriting. APAC’s bank liquidity and emphasis on broader relationships have created a competitive, borrower-friendly fund finance market. While pricing has moved closer to US and…