Barings Australian Private Loan Fund and Barings Developed Asia Pacific Private Loan Fund 1A launched with a total of $690 million.

The Australian Private Credit Fund is an open-end private credit solution that leverages Barings’ capabilities in Australia and New Zealand and aims to deliver attractive returns through current income and capital appreciation. This will be done by investing in direct loans to private mid-market companies in Australia and New Zealand.

This is suitable for institutional and wholesale investors seeking immediate exposure to private credit with attractive yield potential.

It has already been pledged with $230 million by a global multi-investment manager.

The second fund – Developed Asia Pacific Private Loan Fund 1A – is a closed-end fund anchored by an Asian institutional investor.

Justin Hooley, managing director of Barings' Asia Pacific Private Finance Group, said: “We believe the Australian private credit market is attractive due to its stable economic and legal environment and has significant potential for further growth in the coming years.

“We continue to identify multiple opportunities in the Australian private credit market as a result of our market position and the opportunities arising from our current portfolio, despite the fact that there has been a decline in M&A activity. As one of the most active lenders in the region with over 13 years of experience and a diversified portfolio, we are well positioned to take advantage of this exciting opportunity.”

Barings Asia Pacific Private Finance Group focuses on Singapore, Hong Kong, Australia and New Zealand and has deployed over $5.8 billion.

A Schroders survey last month found that 51 percent of financial advisers and wealth managers in the Asia-Pacific region expect to increase private equity allocations to their clients over the next two years, and 40 percent expect to increase private debt allocations.

Shane Forster, Head of Investment Management Asia Pacific, said: “The Asia Pacific private credit market is fast becoming an attractive opportunity for investors. It exhibits comparable characteristics to private credit in North America and Europe, including exposure to high quality borrowers but with less competition for credit opportunities, geographic diversification and exposure to expanding developed economies such as Australia, New Zealand, Hong Kong and Singapore.