Private credit is expected to continue growing as a mainstream asset class, providing a structural financing solution for small and medium-sized enterprises facing shrinking bank lending channels, Park Il Young, chief executive of Korea Investment Corp. (KIC), said on Wednesday.
“Private credit will evolve beyond its role as a mid-risk, mid-return investment generating relatively high interest premiums, positioning itself as a structural solution to fill the void left by banks,” he said in a recorded keynote address at the ASK 2025 global conference.
“Demand for private debt is rapidly expanding to include medium-sized companies seeking additional capital and high-growth companies willing to pay risk premiums.”
In 2024, KIC has classified private debt as a separate asset class to ramp up exposure to the segment.
CAUTION AGAINST OVEREXUBERANCE ON AI
In the private equity space, the sovereign wealth fund sees continued opportunity in sectors undergoing rapid transformation driven by artificial intelligence and digital innovation, as well as companies poised to benefit from lower interest rates.
However, he struck a cautious note about market exuberance surrounding AI, citing economic slowdowns in developed economies following US tariff hikes, escalating geopolitical tensions and climate change-driven inflation.
“Market predictability remains at very low levels … Navigating today’s market requires sharper calculations than ever,” Park said, eching remarks made by National Pension Service Chairman Kim Tae-hyun at ASK 2025.
REAL ESTATE, INFRASTRUCTURE
In the real estate sector, KIC sees long-term investment opportunities in prime assets in Asia that have undergone downward price correction.
In the infrastructure space, renewable energy and digital infrastructure will remain key focuses for KIC by sector for a substantial period of time.
By region, it is upbeat about North America and Europe, supported by robust demand and liquidity.
Parl underscored the rising importance of collaborating with external investment firms and asset owners.
“In the global alternative investment market, it is no longer uncommon to see cross-border strategic partnerships formed to secure prime assets.”
“A new competitive landscape is taking shape, driven by expanded purchasing power through large-scale fundraising and synergies created by sharing investment expertise.”
By Yeonhee Kim
yhkim@hankyung.com
Jennifer Nicholson-Breen edited this article.
