The case for emerging market private credit strengthens

Emerging-market private credit has quietly moved from the fringes to enter a new phase of growth. Despite remaining a relatively small part of the global private credit market, the asset class attracted a record $22.3 billion in deployment in 2025, nearly 40% above the previous record, set in 2022.

We manage $8.4 billion in Alternative Credit strategies at Ninety One, and over the past 18 months our team reviewed close to 1 000 opportunities and completed more than 90 transactions across 28 countries, deploying over $2 billion.

What we’ve learned in that process points to five structural shifts that explain why institutional investors are paying attention, and why we think this is just the beginning.

Financing needs are growing faster than the capital available to meet them

Rapid urbanisation, the energy transition, digitisation 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.

Read: Ninety One expands EM private credit team

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 returns and diversification.

That combination is creating a much broader opportunity for private credit to provide the long-term, flexible capital that businesses and projects across emerging markets need.

Investors better understand the relative risks of EM private credit

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For years, emerging markets carried a blanket reputation for being higher risk. That reputation hasn’t kept pace with reality. Private credit was never one homogenous market, and treating it as such somewhat misses the point.

Emerging market transactions typically come with lower borrower leverage, senior secured loans, robust covenant protections and English or US law governance, often stronger structural protections than comparable developed market deals offer.

In developed markets, competition has shifted negotiating power towards borrowers.

Emerging markets remain a lender’s market, which means we can negotiate strong collateral packages and conservative capital structures while still delivering attractive yields.

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 EM transactions, a third supported infrastructure and real assets, including renewable energy, digital infrastructure and telecommunications. Of the $2 billion deployed, $500 million was invested through the Emerging Africa and Asia Infrastructure Fund, a Private Infrastructure Development Group (PIDG) company we manage, including the groundbreaking development of Egypt’s and the wider MENA region’s first sustainable aviation fuel (SAF) production facility.

Read: Ninety One’s assets hit record R3.9trn as inflows return

Across our wider private markets platform, we also completed our 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.

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Transactions of this complexity illustrate the role private lenders can play in structuring bespoke financing for increasingly large and complex projects.

In Latin America, we 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.

Read: Iran conflict puts the emerging-markets revival to the test

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 heavily 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, our 60-strong team reviewed close to 1000 investment opportunities, allowing us to remain highly selective when deploying capital.

Transaction sizes averaged $23 million. Leverage remained stable at 3-4x, demonstrating that larger deal sizes have not come at the expense of underwriting discipline.

Read: Early stress signals in US private credit market

As transactions become larger and more complex, choosing a manager with the ability to originate, structure and lead deals is becoming increasingly important.

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During the period, we completed our first transaction exceeding $100 million, acting as Mandated Lead Arranger, demonstrating the capabilities required to execute transactions of this scale.

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 us to access a broad range of opportunities, remain highly selective and, increasingly, originate and lead larger, more complex transactions.

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.

Read: World’s biggest money managers favour emerging markets, Citi says

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.

Nazmeera Moola is chief commercial officer, Private Markets, and Alper Kilic is head of Alternative Credit at Ninety One.

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