Debt funds see an opportunity as China cracks down on shadow banking
As otherwise healthy companies are starved of funding, firms like Morgan Stanley-backed Abax are seeking to plug the gap
China’s crackdown on shadow banking is leaving otherwise healthy companies starved of funding, says Abax Global Capital, which is looking to plug the gap.
The manager of debt and private equity funds, which counts Morgan Stanley as a shareholder, aims to raise money from investors later this year and lend more in China, according to Michael Wang, managing partner and president.
Any such fundraising would likely exceed US$235 million, the size of Abax’s last US dollar fund, he said.
The firm is among a handful of debt funds looking to profit as regulators crack down on China’s US$10 trillion shadow banking industry.
China is one of the few bright spots in the nascent private lending market in Asia, where banks have dominated loans to companies. Worldwide, private debt has been growing, and the size of assets under management is on course to surpass US$1 trillion by 2020, according to the Alternative Credit Council.