Asian Private Credit

ADM Capital is one of the few Asian-based investment firms to have invested throughout economic cycles since 1998 to the present day. With an experienced team, a superior structuring ability and deep cultural, regulatory knowledge of jurisdictions across Asia Pacific, we are especially well placed to capitalise on the current opportunities across the region.

Since 2004, when the strategy moved to favour private credit investment, ADM Capital’s Asia funds have invested in 122 private Asian deals in 16 countries, deployed USD2.96bn capital, exiting 104 deals.

ADM Capital is predominantly the sole or lead lender in transactions, sourcing opportunities via long-standing proprietary networks.

Attractive Investment Opportunity

A combination of positive economic growth momentum and increased regulatory pressure on international, regional and domestic banks has created a credit vacuum in the Asia Pacific region leaving many middle market firms without access to long-term financing.

Financing growth with diversity

Demand for Credit Strong due to Positive Economic Growth Momentum

  • India, Indonesia, Philippines and Vietnam will likely play “development catch up” due to younger populations, potential for urbanization and higher productivity, with the resulting domestic investment boom potentially lifting growth to 8%+.
  • Increased intra regional trade, acquisitions and tourism potential in the region underscores the need for ongoing specialist financing
  • Consolidation potential among corporates in more mature Asian economies, with the stronger players needing financing to acquire the weaker onesAsian Private Credit Opportunity: Financing growth with diversity
ADM Capital fills a clear financing void.

Lack of Corporate Funding via Traditional Channels

  • Asia ex-Japan private sector debt roughly 176% of GDP – banking systems are at capacity. Indeed, banks in Asia will likely need to raise $400 billion to $600 billion in additional capital by 2020.
  • International banks have retreated to their home markets, regional banks yet unable to provide specialist and cross border financing, and much less nimble in financing opportunistic deals.
  • Nascent financing systems in frontier markets like Vietnam and Cambodia offer opportunities in the space.
  • Mid-market companies in Asia still largely family owned and unwilling to dilute equity stake, preferring to borrow to finance growth.

Sourcing Approach

ADM Capital typically uses it’s long-standing relationships built up over the last 18 years to source private credit opportunities across the Asia Pacific region.

Investment Sourced (Last 3 Years)
  • ADM Friends and Family
  • Existing Borrower
  • Corp Fin Advisor
  • On Shore Trusted Agent
  • Investment Bank
Highly Selective Due Diligence Process in Asia
ADMCapital_About Funnel_v3
  • Past borrowers are one of our best sources of future deals: not only do they consider repeat borrowings but also inform their “friends and family” (read “other in the industry”) that ADM Capital is a lender that can be trusted, even with key assets.
  • ADM Capital has strong relationships with various counterparts like auditors, financial advisors and consultants.
  • ADM Capital receives access to good quality collateral without much difficulty – due to the carefully built “friendly lender” reputation which has been crafted over the years.
  • ADM Capital’s approach of self-sourcing transactions allows us to target sectors that have positive prospects. Even in those countries with a distressed economic environment, we can find the best assets to finance, implying that these companies bounce back much faster one provided the much-needed liquidity.
  • We have sourced deals from banks, who view us as complementary rather than competitive to their strategy, given their preference to play in the larger ticket, more well recognized companies.
  • Private equity fund managers have also been good sources for deals in those situations where debt was preferred to equity, and in this situations where the funds are in liquidation and need to monetise their remaining assets.
  • At any given time, ADM Capital’s regional investment pipeline across Developed, Emerging and Frontier markets is ~USD800-USD1bn in size.
It’s important to note that ADM Capital’s networks also provide credible reference checks and are sources of market intelligence, often acting as deterrents to potentially undesirable investment opportunities.

Market Insights

ADM Capital, investing in the future


Pipeline Overview

Key Trends
  • Cross border, inter regional investments (especially between developed and emerging markets).
  • Consolidation of weaker players by stronger players in core emerging markets.
  • Financing core promoters to acquire equity stakes from other minority partners/ private equity shareholders.
  • Real estate and financial infrastructure investments in frontier markets.
  • Enhanced tourist movements across the region leading to opportunities in the travel and tourism sectors.
  • Core infrastructure financing support for logistics facilities and data centres among others.
  • Bridge or completion financing, to step into the vacuum left by banks’ slower pace of loan approvals.
  • Financing the improvement in scale and efficiency of the agriculture sector to take advantage of increasing emerging market demand for these products.
  • Asian governments’ priorities to encourage consumption, improve social safety net, and improve environmental sustainability are generating opportunities in consumer sectors, health and elder care, and renewable energy sectors respectively.

ADM Capital Investment Strategy

Structuring to Ensure Consistent Returns
Stable Income Generation, Downside Protection and Upside Participation
  • ADM Capital’s investments in Asia are contractually structured to return consistent, predictable and attractive gross risk adjusted returns, with elements of income, downside protection and upside addition.
  • Experience across several Asian jurisdictions gives us a clear understanding of the regulatory, legal and cultural nuances of individual regions.
  • Diversity of collateral and downside protection enhances borrower discipline and investment recovery. Lowest c/c multiple in investments over the last 5 years is 0.8x.
Sourcing to ensure consistent returns
  • Self generated deal flow through top down and bottom up approach to ensure consistent returns.
  • Opportunistic across geographies and sectors to improve diversity and ensure uncorrelated returns.
  • Investment Advisory Committee formally reviews over 250 private credit transactions per annum, selecting 12-15.

ADM Capital typically uses it’s long-standing relationships built up over the last 18 years to source private credit opportunities across the Asia Pacific region.

Asian Private Credit – Investment Process

ADM Capital’s deal sourcing, due diligence, underwriting and transaction management is a well-tested, rigorous investment process, developed over 20 years of experience in the Asia Pacific region.

Concept Note

Concept is written up for preliminary review by ADM Capital’s Investment Advisory Committee (IAC). Initial due diligence. In excess of 100 deals reviewed per year.

Due Diligence, Initial Legal Review, Draft Term Sheet

Rigorous and formal financial, legal, environmental, accounting, tax, operational and industry review, as well as appropriate reputation checks. Approximately 50 deals fully due diligenced per year.

IAC Review, Discussion. Approval of Final Term Sheet and Execution

Due diligence findings are brought to the IAC for final approval. Documentation is reviewed by internal counsel. 8 to 15 approvals per year. 8 to 12 transactions are executed.

Allocation Committee

ADM Capital’s independent Allocation Committee allocates all transactions to the relevant Fund based on risk limits and guidelines, as monitored by ADM Capital’s Risk Management Department, on Fund AUM and available cash.

Disbursement of Funds

Documentation is executed by appropriate authorised signatories and captured by ADM Capital’s Operations and Accounting Departments, and a reconciliation conducted with records maintained by the Administrator.

Ongoing Project & Client Management

Considerable time spent working with existing management to create value by focusing on operations, financials, strategy and corporate governance.


Majority of exits are via refinancing or secondary sale transactions with minimal dependence on capital markets, and ADM Capital ensures exit options are numerous.

Deal Sourcing

Investment team reviews in excess of 1,000 transactions per year. Transactions are largely self originated.

Underwriting Standards

ADM Capital implements a rigorous and systematic investment approval process, supervised by the Investment Advisory Committee.