In the face of economic uncertainty, long-term investors are facing challenges in their search for reliable and consistent sources of income. We discuss the case for enhancing EM private market exposure with an allocation to EM illiquid credit.
Key takeaways
Private markets investing shows no signs of abating, however the focus is often on emerging markets private equity (EM PE).
While the asset class can offer attractive returns, diverse exposures and access to opportunities that aren’t available on public exchanges, it comes with its challenges.
We look at these challenges and set out some considerations for an alternative way of accessing private markets in EM – an allocation to EM illiquid credit.
Limited competition for EM illiquid assets and a lack of alternative pools of capital mean managers with deep experience in this space can act as the first port of call when opportunities arise.
EM private loans can be an effective way of diversifying the risks of EM PE investments, as well as bringing their own unique benefits.