Muzinich closes debut Asia debt fund on $500m

LPs include DBS Bank, which provided USD 200m in 2021, shortly after the fund was launched as a post-pandemic opportunity fund seeking USD 300m. The target was revised upwards to USD 500m; about USD 450m had been secured as of May. DBS sits on the investment and advisory committees.

Andrew Tan, head of Asia Pacific private debt at Muzinich (pictured), said that in the current environment, the fund has benefited from a significant increase in interest from family offices seeking consistent income streams and front-ended interest payments in lieu of the lumpy distributions of private equity. This has contributed to greater competition among debt managers.

“Private credit has been the reverse of private equity in that many GPs are trying to jump on the Asia bandwagon now. We see quite a few entrants with no prior history in Asia private credit,” Tan told AVCJ earlier this year.

“Will they ever move into the core to lower middle market segment that we focus on? Many of these GPs are deploying out of large global funds, and just looking at how they have approached US and Europe deal flow, I’m not sure it is worth their while to get involved in smaller deal sizes that are sub-USD 50m that feature in our market segment.”

New York-headquartered Muzinich has been active in Asia in public and private credit for small to medium-sized enterprises since at least 2017. The Asia team – spread across bases in Hong Kong, Singapore, and Australia – leverages the resources of its partner organisation.

Essentially, the firm aims to allow global investors to participate in the region’s growth story with improved downside protection versus equity strategies and still relatively lower competition for deals versus the US and Europe.

The fund will target corporate, family, and financial sponsor-owned companies with EBITDA in a range of USD 5m to USD 50m with at least three years of audited financial and operating history. The strategy is to be diversified across geographies and industries.

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• Topics
• Fundraising
• Credit/Special Situations
• Southeast Asia
• Singapore
• Asia
• Muzinich
• private debt
• Fundraising