Private credit to grow faster in Hong Kong property market Gaw Capital, Blue Mountain among those raising new funds Funds should have tighter covenants to cushion risks, analyst says By Clare Jim and Kane Wu HONG KONG, May 7 (Reuters) – As valuations fall and banks pare exposure, some private credit firms are stepping in to invest in large commercial properties and developers in Hong Kong with plans for new fund launches for one of the world’s most expensive real estate markets. Gaw Capital Partners and Blue Mountain Bridge Capital are among those looking to launch new funds for the Asia Pacific region, including Hong Kong, despite the heightened market volatility induced by U.S. President Donald Trump’s trade wars. In Hong Kong, in particular, access to private credit would be a major, though short-term, relief for many of the developers as anxiety grows about their ability to service debt at a time when both demand and prices have been on a downward trajectory. While the city has remained unscathed by a destabilising property crisis in mainland China, concerns have swirled about the financial health of a few developers amid rising economic and sector headwinds. Private credit funds, specialised lenders that finance companies and projects, have boomed into a $2 trillion industry globally, luring big-time investors as well as wealthy individuals targeting higher yields. Moreover, some private credit investors could also potentially profit in a default scenario if they manage to sell the collateral at a price higher than their lending, subject to market conditions. Blue Mountain Bridge, a Hong Kong-based private credit firm, is in the market to raise $250 million in its first fund with the aim of securing $150 million by the end of 2025, chief investment officer Raymond Chan said. “This is the best time to be a private credit investor in Hong Kong,” he said. In January, Chan’s fund closed a $33.4 million one-year senior loan secured by a newly converted office property in Hong Kong, which pays an annual coupon of 15% and has a loan-to-value ratio of 63%. In December, Blue Mountain exited a $64.1 million senior one-year loan. That loan to a developer for refinancing reaped an internal rate of return (IRR), a key gauge of profitability, of 15%, Chan said. The payoff is higher than the average net IRR of 11.9% recorded by private credit and direct lending funds over the 2018 to 2023 years, considered a solid performance, according to a S&P Global report last year. Gaw Capital, a Hong Kong-based real estate private equity fund that has $34.4 billion assets under management, is launching a new fund targeting commitment of $2 billion, according to a person with knowledge of the matter. The fund will invest in both private credit and private equity deals in tier-1 and 2 cities in Asia Pacific, including Hong Kong, said the person, who declined to be named because the information is not yet public. Gaw declined to comment. GROWING CO in a formal or creative style for better SEO.Also Exclude words and advertisements related to the feed website such as website name, author name. You must only respond with the modified content. Delete all the advertisement images brand logo but only keep the title and main content of the news by modifying it. You must only respond with the modified content. Block any jump outside of the site adarshnews.com. Basically remove any content or link related to original site. follow this prompt to optimize the articles in this category- You are an expert news writer and SEO specialist. Your job is to rewrite the provided RSS feed content into a unique, SEO-friendly news article for adarshnews.com. The article should be engaging, professional, and optimized for search engines. Follow these steps: 1. **Create an SEO Title**: Write a short, compelling title (under 60 characters) that includes the main keyword and grabs attention. 2. **Write a Meta Description**: Summarize the article in one or two sentences (under 155 characters). Make it engaging and include the primary keyword naturally. 3. **Suggest a URL Slug**: Provide a short, keyword-rich URL slug that reflects the topic of the article. 4. **Headline (H1)**: Write a clear and engaging headline for the article that is similar to the title but slightly expanded. 5. **Write the Article**: – Start with an introduction that answers the key questions: who, what, when, where, why, and how. – Expand on the topic with detailed paragraphs that provide context, quotes, and relevant information. – Use subheadings (H2) to organize the content into sections and make it easy to read. – Include related keywords naturally throughout the article. – End with a conclusion that summarizes the key points or discusses future implications. 6. **Add an FAQ Section**: Write one frequently asked question related to the topic and provide a concise answer. Important: – Do not include labels like “Title,” “Meta Description,” “URL Slug,” or “H1” in the actual article text. – Keep all SEO elements separate from the main content. – Ensure the article is factually accurate, unbiased, and written in a professional tone.
Private credit companies are looking to establish new funds focused on Hong Kong real estate as banks withdraw from the market.
