Thai duo unite for US private credit
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Thai duo unite for US private credit

Krungthai Asset Management (KTAM) has joined hands with Kiatnakin Phatra Securities (KKPS) to launch private funds in the US, aiming to capture high returns in the growing private credit business there, says KTAM chief executive Chavinda Hanratanakool.

KTAM US Private Credit Unhedged (KTPCRED-UI) and KTAM US Private Credit (KTPCREDH-UI) funds will be offered to wealthy investors, not for retail, she said.

Private credit refers to lending provided by a non-bank lender and tailored to the borrower's specific needs. Most of the companies requesting such loans are private, non-listed companies.

"Private credit is gaining popularity as commercial banks have begun to reduce their role as a source of loans, applying more stringent requirements for credit offerings," said Ms Chavinda.

Small and medium-sized enterprises (SMEs) face difficulties obtaining bank loans, so investment management companies have started to play a greater role offering funds to SMEs as they are more flexible in terms of criteria, she said.

Private credit has low volatility compared with traditional assets, meaning it helps improve the risk diversification of investors' portfolios, with low default rates and higher recovery rates, said Ms Chavinda.

"We believe private credit can serve as a tool to offer additional returns for investors," she said.

One new fund offers hedging of exchange rate risks, while the other does not, allowing investors to invest according to their risk tolerance, said Ms Chavinda.

These funds invest in high-risk and complex assets, meaning they are not offered to retail investors.

Available from May 27 to June 12 with a minimum investment of 500,000 baht, investors can purchase the funds from KTAM and KKPS only.

KTPCRED-UI and KTPCREDH-UI funds focus on investing in investment units of Ares Strategic Income Offshore Access Fund, which is the master fund.

The master fund aims to invest at least 95% of the fund's assets in Ares Strategic Income Fund (ASIF), which is the underlying fund.

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