The private credit and private equity boom in Asia is poised for a cycle test, with liquidity and exit challenges looming in public markets across the region.
Buyout activity reached $138 billion in 2024, marking the second-best year in a decade, while private credit AUM has surged six-fold since 2014 to ~$93 billion. Yet, as Michael Goosay, CIO at Principal Asset Management, highlighted at the Milken Institute Asia Summit, much of this capital has flowed into private markets without experiencing a true downturn: “Riskier issuers have migrated to private balance sheets, and those are the companies that wind up having problems when the economy turns.”
Jeffrey Jaensubhakij of GIC added that exit opportunities remain limited outside India, noting the importance of strong corporate governance initiatives in Japan and Korea to improve public market performance and unlock liquidity for private equity investors.
Asia’s private market growth story is robust—but as investors weigh returns against illiquidity risk, the upcoming cycle may test the resilience of these strategies.