KKR Says Now a Good Time to Lean Into Asia's Credit Markets.

According to a white paper published by KKR & Co., Asia's credit markets present attractive investment opportunities due to strong demand for financing, undervalued assets, and high-quality issuers in the region. The recent defaults among Chinese property developers have reset asset prices, making them more appealing compared to similar deals in the US and Europe. The demand for financing in Asia exceeds supply, as banks have tightened lending criteria and investor support has been subdued. KKR believes this trend will continue or even intensify in the future. With a significant amount of high-yield debt maturing in the next few years, there is ample opportunity for players in both private and broadly syndicated markets. KKR also sees potential in select sectors in China, such as large technology firms with positive net cash flows and investment-grade insurers. Additionally, issuers in Hong Kong with offshore assets and limited exposure to China may have upside potential. The Asia-Pacific region's share of the global private credit market is growing rapidly, attracting investors with higher rates of return. KKR highlights that Asia's economic outlook is gaining momentum post-pandemic, particularly in business travel and tourism. The potential rate cut by the US Federal Reserve later this year is expected to further support growth in the region. [Extracted from the article]