Asia’s asset management sector set to grow by 4.5% in 2024

The private credit market in APAC is expected to grow 8.0% by 2027.

The asset management sector in Asia is expected to expand by 4.5%, representing two-thirds of the worldwide growth for that year, the Monetary Authority of Singapore said at the AIMA Singapore Annual Forum.

The global alternative sector within the asset management industry remains strong with its AUM growing a record high of approximately $5.8t (US$4.4t) in 3Q2023, representing a 4.6% increase from 2022.

This growth was driven by the asset performance and returns which also improved the overall hedge fund performance in 2023.

Gains were fueled by the decline in inflation, positive developments in mergers and acquisitions (M&A), and  the positive outlook for 2024 contributed to the returns.

In 2024, hedge fund performance is expected to improve further with an estimated annual growth rate of 3.6% between 2022 and 2028, to an estimated $6.9t (US5.2t).

MAS also projects strong growth in private credit which raised an aggregate capital of about $20.3b (US$151.9b) in 3Q2023.

Meanwhile, global private credit AUM is expected to grow at a compound annual growth rate (CAGR) of 11.1% between 2022 and 2028 to reach an all-time high of $3.7t (US$2.8t). This would be almost double the 2022 AUM of $2.0t (US$1.5t).

Outlook for private markets in APAC is also positive with an annual growth rate of 12.7% from 2021 to 2027 while the APAC-focused private credit AUM is expected to reach a new all-time high of $155.1 (US$115.9b) at the end of 2027, reflecting a CAGR of 8.0% from 2021 to 2027.