Alternative credit strategies such as direct lending, energy infrastructure credit, real estate debt, and collateralised loan obligations can provide shelter for portfolios during uncertain times.
The rest of this year should produce a dynamic market environment that will offer alternative credit investors many opportunities to access attractive returns while improving overall diversification levels, according to new research from Nuveen.
Sovereign wealth funds such as Mubadala, the Abu Dhabi Investment Authority and Singapore's GIC have been placing more emphasis on private lending, according to two recent reports.
Regional investors look set to seek more investments in the asset class, especially from North America and Asia, say senior executives at asset owners and fund houses.
The number of lenders reducing their Asian exposure is seen to be growing fast amid the coronavirus crisis, leaving asset managers keen to fill the financing gap.
The UK firm's Asia ex-Japan strategy has hit capacity and closed to new investors. It comes as Hermes adds a hire in Asia and launches a direct lending business.
Reform of Ucits rules in Europe would allow more sales of direct lending and other credit products to Asia investors. The call for change comes as the European Commission implements a €315bn loan stimulus plan.