Credit Firm SC Lowy Boots Private Debt Focus With New Fund

(Bloomberg) — Credit investor SC Lowy Financial HK Ltd. will pivot more toward private credit and close a fund focused on public securities, in a bid to seize more opportunities in the burgeoning asset class.

Hong Kong-based SC Lowy said in a statement Thursday that it will begin a gradual wind down of the Primary Investment Fund, which focuses on market-making activities in public securities across Asia Pacific, the Middle East and Europe. In its place, the firm will in mid-2025 launch a new interval fund, which focuses on direct lending among other securities. 

The timing of SC Lowy’s shift into private credit, notably in Asia and the Middle East, comes as secondary loan market and high-yield bond opportunities dwindle, the firm said in the statement. 

SC Lowy’s bet on private markets follows the footsteps of other global players, including BlackRock Inc., Tikehau Capital and Navis Capital Partners. These institutions have set up private funds in hopes of capturing higher returns in Asia Pacific, a region that represents just a fraction of the $1.6 trillion global private credit market. 

SC Lowy, which currently has $1.6 billion assets under management, has invested in private credit since 2011, according to their website. 

The firm’s Strategic Investments II and Strategic Investments IV funds, which focus on the asset class, had delivered net internal rates of return of 12.45% as of June 30, 2024 and 15.7%, as of Sept. 30, 2024, respectively, since the funds’ inceptions in 2021 and late 2023, according to a December document seen by Bloomberg. 

More stories like this are available on bloomberg.com