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.
Wealthy Chinese investors are increasingly looking at real estate in markets like Singapore, Australia and Japan while also reconsidering Hong Kong amid tensions involving the US and Europe.
Institutional investors set aside capital for private debt during the era of low rates, but the alternative asset class could still be attractive in the current environment, according to Australia’s Queensland Investment Corporation.
The AU$85 billion ($61.6 billion) Australian super fund has some exposure to indebted property developer Evergrande. Meanwhile, China’s construction finance is part of its core strategy in real estate.
The $95 billion Korean savings will set up a separately managed account for real estate debt investment early next year in order to shorten decision-making and help it win deals in a crowded market.
As typical real estate investment yields continue to fall, asset owners are increasingly looking at obtaining returns from the financing portion of property deals.