Jeff, could you give me an insight into the overall rise in emerging market (EM) private capital investment?
India, Southeast Asia and the Middle East have all recorded strong starts to 2025, with fist half investment value reaching $18.2bn (£13.5bn), $11.1bn (£8.2bn) and $4.8bn (£3.5bn), respectively.
We see increases in deal value for private credit and infrastructure in particular. Private capital fund managers and their co-investors continue to invest behind durable themes in the current uncertain global environment.
Additional capacity is needed across digital, energy and transportation infrastructure across global growth markets.
Similarly, with private credit, companies are in need of flexible financing options and may not want to raise equity given different valuation expectations; private credit funds can help fill this need.
What are the drivers behind EM private credit being on course for a record year?
We have witnessed steady growth in private credit investment activity across emerging and growth markets as EM-dedicated private credit fund managers mature and global players expand their footprints into new markets.
Equity is not always well-suited to the needs of many private businesses, which may want to avoid dilution.
Private credit funds can provide tailored financing solutions whereas traditional banks often serve only a small fraction of these businesses.
Private credit funds are also increasingly active in project finance for infrastructure – taking part alongside traditional lenders in markets like Colombia, India and a range of African countries.
The rise of secondary investment activity stands out: what is fueling this?
Fund managers want to explore all possible avenues for generating distributions for their limited partners (LPs). Increasingly, many are using the secondary market to raise continuation vehicles – allowing existing LPs to sell and receive distributions while also retaining assets to benefit from potential future upside.
We see more and more cases of this contributing to growth in general partner-led secondary deals. On the LP-led side, institutional investors globally are taking a proactive approach to managing their portfolios given a global slowdown in exits, and this often involves making use of the secondaries market.
The key change for emerging and growth markets is that development finance institutions (DFIs) – an important source of capital for EM funds – are also now exploring ways to participate in and help build the secondaries market.
What are the key factors driving infrastructure investment across GPCA markets?
Gaps in basic services – such as power, water and mobile/internet – remain across many parts of the world, and demand from consumers and businesses continues to grow.
Governments need to address these shortfalls and have worked to create policy frameworks supportive of private investment in infrastructure.
At a time of global uncertainty, infrastructure offers a hedge against inflation and downside protection – all in markets where there is massive unmet demand for basic infrastructure.
AI and digitalisation trends are contributing to growing needs for both energy and digital capacity.
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