Hong Kong’s $1.6 billion credit investor SC Lowy is shifting its investment focus to private credit in Asia and the Middle East to capture investor demand and rising opportunities.
The money manager will gradually wind down its first vehicle Primary Investment Fund, an open-ended fund focusing on market-making activities in public securities across Asia Pacific, the Middle East and Europe, according to a statement.
The decision to shut down the fund that generated total profits of $993 million came after shrinking opportunities in the secondary loan market and high-yield bonds, it said.
SC Lowy is planning to launch an interval fund in mid-2025 to make direct lending deals with a smaller allocation to tactical liquid credit investments. The upcoming semi-liquid fund will offer quarterly liquidity and potential annual dividends.
“By transitioning into an interval fund structure, we can embrace a more flexible investment approach that leverages both episodic dislocations in the liquid credit market and a robust pipeline of private direct lending opportunities,” said Michel Lowy, who co-founded the firm in 2009 and is its current CEO.
Rising interest in private credit strategies dedicated to emerging markets has paved the way for general partners to expand their product offerings through new fund franchises to tap bigger client pools in the past twelve months.
The growth in assets under management of private debt in APAC has outpaced other regions, rising by 19.5% from 2020 to 2023, compared with the global average of 11.5%, show latest data from Preqin. At $99.3 billion, the AUM of private debt in the region now accounts for 6.6% of the global AUM at $1.5 trillion.
