Private Credit Solutions: A Closer Look at the Opportunity in Emerging Markets

EMPEA is pleased to share with you Private Credit Solutions: A Closer Look at the Opportunity in Emerging Markets, an in-depth study of the private credit investment landscape across emerging and frontier economies. The report gathers the latest EMPEA data on overall industry activity while delving deeper into the details of what makes emerging market private credit qualitatively different from its counterpart in developed markets, as well as private equity in emerging markets.

Since EMPEA’s previous Private Credit Solutions report (Mezzanine Financing in Emerging Markets) was published in 2014, investor interest in private credit broadly defined has grown. Capital raised for private credit vehicles targeting emerging markets reached USD9.4 billion in 2018—the highest level recorded by EMPEA since the inception of our data program in 2006. Meanwhile, the share of global institutional investors surveyed by EMPEA who plan to begin investing or expand their investments in private credit in emerging markets has increased from 24% in 2014 to 47% in 2018. The global search for yield is naturally a key factor in the rise of private credit, but investors are also turning to emerging market credit opportunities because of their favorable risk-return profiles, particularly vis-à-vis heightened competition and deteriorating protections for alternative lenders in North America and Western Europe.