Hong Kong’s elite shift to private credit for high yields

Wealthy investors from Hong Kong and mainland China are increasingly turning to private credit markets to chase high yields amid sliding stock and property sectors. Family offices such as Nan Fung Trinity are boosting investments in alternative assets offered by firms like Blackstone Inc and Apollo Global Management Inc. Others, including Carret Private Investments Ltd, are engaging in direct private credit deals with returns exceeding 20%. UBS Group AG’s wealth management arm is marketing private credit funds to Asian clients. Despite the lure of hefty returns, concerns over rising defaults and lack of liquidity persist. Regulators are increasing scrutiny as defaults in private credit rise to about 3%-5%. Demand for alternative assets remains high among high-net-worth individuals, with DBS Group noting a 300% surge in sales of semi-liquid fund products.