(Bloomberg) -- Asia’s nascent private credit industry is getting a shot in the arm as alternative asset manager Ares SSG launches its biggest secured lending fund in the region.

Designed to provide secured loans to businesses in Asia Pacific, the fund has raised more than $1.6 billion and is double the size of its predecessor closed in 2017, according to a statement from Ares SSG. That’ll add to the $2.7 billion in private debt raised in the region so far this year, Preqin Pro data shows.

Private credit, which allows borrowers to bypass banks and enjoy more flexibility, started taking off in 2017 in Asia but has suffered a pandemic-induced slowdown since last year. The year-to-date amount of such lending in the region also pales before Europe’s $37.7 billion and North America’s $49.5 billion, respectively.

Ares SSG’s new fund will target China, India and Southeast Asia, according to Edwin Wong, the firm’s chief executive officer. “The COVID-19 pandemic has further exacerbated the structural issues in the Asia financing market, accelerating bank retrenchment and created a more urgent need for direct lending capital to provide credit to Asian businesses.”

Credit tightening in China’s real estate sector is also creating opportunities for direct lenders, he added.

Founded in 2009, Ares SSG had approximately $7.5 billion of assets under management as of June 30.

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