Nazmeera Moola
Emerging market private credit is entering a new phase of growth, with institutional investors broadening allocations beyond developed markets in search of stronger lender protections, attractive risk-adjusted returns and greater portfolio diversification.
The asset class attracted a record US$22.3 billion[1] in deployment across FY2025—nearly 40% above the previous record set in 2022 of US$16 billion.[2] The record deployment reflects growing institutional interest in emerging market private credit as investors broaden allocations beyond traditional developed markets.
Ninety One manages US$8.4. billion in Alternative Credit strategies. Between January 2025 and June 2026, the firm reviewed close to 1000 investment opportunities, completing over 90 transactions across 28 countries and deploying more than US$2 billion across renewable energy, digital infrastructure, logistics, transportation and industrial projects and corporates.
What’s driving the next phase of emerging market private credit?
Five structural shifts are reshaping emerging market private credit. While the asset class remains a relatively small part of the global private credit market, broader institutional participation, larger transaction sizes and rising demand suggest it is entering a new phase of development.
1. Structural financing demand continues to outpace available capital
Rapid urbanisation, energy transition, digitalisation and infrastructure investment continue to drive substantial financing requirements across emerging markets. At the same time, regulatory capital requirements continue to constrain traditional bank lending, creating significant opportunities for specialist private lenders to provide long-term financing solutions.
Nazmeera Moola, Chief Commercial Officer, Private Markets: ” The growth we’re seeing in emerging market private credit isn’t being driven by one factor. Financing needs are growing at the same time as institutional investors are looking beyond developed markets for new sources of return and diversification. That combination is creating a much broader opportunity set for private credit to provide the long-term, flexible capital that businesses and projects across emerging markets need.”
2. The relative risks of emerging market private credit are better understood by investors
Emerging markets have long been perceived as higher risk. As the market has developed, greater data, transaction history and investor experience are enabling a more nuanced assessment of relative risk. Private credit is not a homogenous market, although emerging market private credit transactions often benefit from more conservative lending characteristics than comparable developed market deals. Borrowers typically operate with lower leverage, loans are predominantly senior secured, covenant protections remain robust and transactions are frequently governed by English or US law, giving lenders stronger structural protections than are often available in developed markets.
Alper Kilic, Head of Alternative Credit: “The perception of emerging market risk has not kept pace with reality. Private credit is not one market, and investors need to look beyond the label. In developed markets, competition has shifted negotiating power towards borrowers. Emerging markets remain a lender’s market, allowing us to negotiate strong collateral packages, comprehensive covenant protections and conservative capital structures while still delivering attractive yields.”
3. Capital in EMs is financing an increasingly sophisticated real economy
Unlike many developed market private credit portfolios, where lending has become concentrated in sponsor-backed software and services businesses, emerging market private credit continues to finance the infrastructure and essential assets underpinning long-term economic growth. As projects increase in scale and complexity, demand is also growing for sophisticated, tailored financing solutions that traditional sources of capital may be less equipped to provide.
Of the 90+ completed transactions, a third supported infrastructure and real assets, including renewable energy, digital infrastructure and telecommunications. Of the US$2 billion deployed, US$500 million was invested through the Emerging Africa and Asia Infrastructure Fund, a Private Infrastructure Development Group (PIDG) company managed by Ninety One, including the groundbreaking development of Egypt’s and the wider MENA regions first sustainable aviation fuel (SAF) production facility.
Across the wider private markets platform, Ninety One also completed its first transaction in Oman: a senior secured project finance loan, arranged alongside the IFC, to finance construction of a traceable, solar grade polysilicon manufacturing facility. Once operational, the facility is expected to be the largest single site and lowest cost facility of its kind outside China, while mitigating significant carbon emissions. Transactions of this complexity illustrate the role private lenders can play in structuring bespoke financing for increasingly large and complex projects.
In Latin America, the firm completed 12 transactions across Brazil, Chile, Colombia, and Mexico. These included financing the region’s largest renewable energy developer and remediating tailings at a major Chilean copper mine, building sustainable data centre infrastructure, decarbonising agricultural cold storage and extending small, socially responsible loans to Colombian pensioners through a leading microfinance provider.
4. The opportunity set is expanding, but access remains a constraint
As institutional demand grows and transaction sizes increase, access to emerging market private credit opportunities remains highly dependent on specialist origination networks and local expertise. Unlike more established private credit markets in Europe and the US, emerging markets require specialist local knowledge and relationships built over many years, creating significant barriers to entry.
During this period, the 60-strong team reviewed close to 1000 investment opportunities, allowing it to remain highly selective when deploying capital. Transaction sizes averaged US$23 million. Leverage remained stable at 3–4x, demonstrating that larger deal sizes have not come at the expense of underwriting discipline.
As transactions become larger and more complex, choosing a manager with the ability to originate, structure and lead deals is becoming increasingly important. During the period, Ninety One completed its first transaction exceeding US$100 million, acting as Mandated Lead Arranger, demonstrating the capabilities required to execute transactions of this scale.
Kilic: “Access remains one of the biggest differentiators in emerging market private credit. Our long-standing relationships with international investment banks, regional financial institutions development finance institutions, local governments and corporates enable access a broad range of opportunities, remain highly selective and, increasingly, originate and lead larger, more complex transactions.”
5. Investors are broadening beyond developed markets
As competition has intensified in developed markets, institutional investors are broadening private credit portfolios beyond North America and Europe. Emerging markets offer genuine geographic diversification and an expanding opportunity set, supported by structural financing demand, stronger lender protections and lower competition among private lenders.
Together, these trends point to a market that is becoming larger, more sophisticated and increasingly capable of supporting complex, long-term financing across emerging markets.
Moola concluded: “Emerging market private credit is at an inflection point. Investors are no longer viewing it as a niche allocation, but as a strategic part of global private markets portfolios. The next phase will be about moving from recognition of the opportunity to greater institutional allocation.”
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