UPDATE: Private credit is poised to become a crucial financing solution as bank lending tightens, according to Park Il Young, CEO of Korea Investment Corp. (KIC). Speaking at the ASK 2025 global conference on October 29, 2023, he emphasized that this asset class is shifting from mid-risk, mid-return investments to a structural necessity for small and medium-sized enterprises (SMEs).
In his keynote address, Park stated, “Demand for private debt is rapidly expanding,” indicating a significant opportunity for medium-sized and high-growth companies needing additional capital. KIC plans to classify private debt as a distinct asset class in 2024 to enhance its investment strategy and exposure.
As banks continue to reduce lending, the urgency for alternative financing solutions has never been greater. Park highlighted that private credit can effectively fill the gap left by traditional banking institutions, which are facing challenges in lending due to economic shifts.
While addressing opportunities within the private equity sector, Park noted that KIC sees potential in industries transforming through artificial intelligence and digital innovation. However, he urged caution regarding the current market enthusiasm surrounding AI, citing factors such as economic slowdowns in developed economies, rising geopolitical tensions, and climate change-driven inflation as significant concerns. “Market predictability remains at very low levels,” Park remarked, emphasizing the need for strategic navigation in today’s financial landscape.
The ASK 2025 conference, taking place at Corad Seoul from October 29-30, serves as a platform for investment professionals to discuss emerging trends. Park pointed out the increasing importance of partnerships with external investment firms to secure prime assets in a competitive landscape. “A new competitive landscape is taking shape,” he stated, highlighting the synergies created through collaboration in the global alternative investment market.
In the realm of real estate, KIC is optimistic about long-term investments in prime assets across Asia, particularly those that have seen price corrections. In infrastructure, the focus remains on renewable energy and digital infrastructure, with a positive outlook for developments in North America and Europe, driven by strong demand and liquidity.
As the investment community continues to adapt to changing market conditions, KIC’s strategic approach to private credit and other asset classes demonstrates a proactive response to the urgent needs of SMEs and the broader economic landscape. Investors and stakeholders are encouraged to monitor these developments closely as they unfold.
For more insights and updates from the ASK 2025 conference, stay tuned as the event progresses.
