Singapore’s January Capital has collected more than $85 million in the first close of its debut private credit fund, joining a raft of asset managers in the fundraising market for Asia Pacific-focused private credit strategy this year.
The first close of the Growth Credit Fund has received capital commitments of $20 million each from the US International Development Finance Corporation (DFC) and an unnamed European development financial institution, according to a company statement. Family offices and private wealth firms have also contributed to the milestone. It is expected to hit the final close next year.
The fund aims to offer senior-secured credit to growth-stage, sponsor-backed technology companies in the region, the statement said.
Many companies are looking for non-dilutive debt financing to dodge down rounds after closing equity funding at peak valuations in 2021, providing private lenders exposure to a different mix of deal flow besides startups in distressed situations.
“Amongst our existing portfolio of over 60 companies, the number one request has been for less-dilutive forms of financing such as growth credit, which often have different use cases to pure equity and is generally a less expensive form of capital,” said January Capital’s founding partner and co-head of credit Jason Edwards.
Prior to the fund’s first close, January Capital, known for its equity investments, claimed to have completed several single-asset credit transactions underwritten by its existing limited partner (LP) base, including loans for a Southeast Asian e-commerce enablement firm and an Australian software company.
Rising interest in private credit strategies dedicated to the region has paved the way for general partners (GP) to expand their product offerings through new fund franchises to gobble bigger fees and tap new client pools this year. January Capital roped in venture debt veteran Chin Chao, now partner and co-head of credit, to expand into the strategy last year, DealStreetAsia reported.
Granite Asia (formerly GGV Capital) is another long-time startup investor entering the private debt world this year. After parting ways with its US and China counterparts, the firm plans to raise a private debt fund dedicated to SMEs in the region to become more than just a venture capitalist. Temasek-linked InnoVen is also seeking around $350 million for venture debt funds, DealStreetAsia reported.
The growth in assets under management of private debt in APAC has outpaced other regions, rising 19.5% from 2020 to 2023, compared with the global average of 11.5%, show latest data from Preqin. At $99.3 billion, the AUM of private debt in the region now accounts for 6.6% of the global AUM at $1.5 trillion.
Last week, January Capital welcomed Australian GP stake investor Scarcity Partners as its shareholder through a 20% share sale. GPs selling its minority stakes to another asset manager are often motivated by the benefit of strategic partnerships that could help with bigger GP commitment in subsequent funds and expansion into new product offerings and LP pool.
