(Bloomberg) -- French asset manager Tikehau Capital SCA will launch its debut private credit fund in Asia, partnering with UOB-Kay Hian Holdings Ltd. to take advantage of the Singaporean firm’s local knowledge. 

Both companies will invest $50 million each in the venture to finance mid-sized corporates. Singaporean state-owned investor Temasek Holdings Pte is one of Tikehau’s shareholders. 

“There is no secret sauce, but you need boots on the ground,” Antoine Flamarion, the firm’s co-founder, told Bloomberg Television on Wednesday. “Throwing money and lending money to companies is very easy, but what you need to do is deliver good returns for your investors.” 

Private credit, in which investment funds lend directly to companies, is gaining popularity in the region. While Asia Pacific comprises only about $81.3 billion of the $1.7 trillion market, its growth is outpacing other regions, according to data from research firm Preqin Ltd.

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Tikehau invests in private debt, private equity and real estate, as well as stocks and bonds. With €43.2 billion ($46 billion) in assets — over 40% of which is in private debt — it seeks to break into the expanding market using UOB-Kay Hian’s local networks. 

The firm is looking to lend in developed markets such as Singapore, Korea, Taiwan and Australia due to legal certainty in case of a default, according to co-founder Mathieu Chabran. It is targeting low- to mid- teen returns on the investment.

The company last month hired former BPEA Credit Managing Director Colin Lim as head of private debt in Asia. Nikko Asset Management Co. was in advanced talks to acquire a stake in Tikehau and form a partnership in Asia, Bloomberg News reported in December. 

“The market is becoming very big — giant in the US, big market in Europe and it’s just starting in Asia,” Flamarion said. 

 

--With assistance from Elffie Chew and Haslinda Amin.

(Updates to add detail on shareholder, co-founder’s comments from second paragraph)

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