SINGAPORE – On December 6, Singapore’s state investment company Temasek announced the creation of a wholly-owned private credit entity with an initial portfolio valued at $10 billion. The portfolio comprises direct investments and credit funds, underscoring Temasek’s strategic expansion into the rapidly growing private credit market.
The private credit market, which involves non-bank institutions lending to companies, has surged in popularity among institutional investors in recent years. This growth has been driven partly by tighter banking regulations following the Silicon Valley Bank crisis in 2023, which made traditional lending more costly for riskier ventures.
According to Preqin data, the private credit market is projected to expand from US$1.5 trillion in 2023 to US$2.6 trillion by 2029. Reflecting this trend, BlackRock, the world’s largest asset manager, announced just days earlier, on December 3, its acquisition of private credit firm HPS Investment Partners for approximately US$12 billion.
Temasek’s newly established private credit entity will operate under the leadership of Nicolas Debetencourt, who has served as the head of Temasek’s credit and hybrid solutions team since 2016. The entity will be managed by a team of around 15 credit investment professionals across New York, London, and Singapore, transferred from Temasek’s existing credit and hybrid solutions division.
In a statement, Temasek highlighted its decade-long experience investing in credit funds and emphasized that a dedicated private credit entity would enable the company to scale its operations and seize global opportunities in the burgeoning market.
“This new structure will allow us to enhance our portfolio and deepen our involvement in global private credit markets,” the company stated.
The establishment of the private credit entity complements Temasek’s broader asset management activities under its Seviora Group. The group includes SeaTown Holdings International, a firm offering private credit solutions in Asia. Temasek’s move positions it to capture opportunities not only in established markets like the United States and Europe but also in emerging markets with growing demand for alternative financing solutions.
The appeal of private credit lies in its potential for higher returns compared to traditional fixed-income investments. With banks stepping back from riskier loans due to stringent capital requirements, private credit players have filled the gap by offering tailored financing solutions to companies across sectors.
For investors like Temasek, private credit offers diversification benefits and a steady income stream, making it a compelling asset class in a volatile global economic environment.