Temasek’s SeaTown closes third private credit fund after raising more than US$612 million

[SINGAPORE] SeaTown Holdings, an investment manager indirectly owned by Temasek, said on Wednesday (Aug 27) it has closed its third private credit fund after investors committed more than US$612 million.

The closing – the fund’s first – drew interest from new and returning investors, the company added. It secured commitments from “an increasingly diverse and global group” of investors spanning the Middle East, Japan, Taiwan and Singapore.

SeaTown is a wholly owned subsidiary of Temasek’s asset management group, Seviora Holdings.

As the third vintage of SeaTown’s private credit franchise, the fund will provide tailored financing for companies across sectors in Asia-Pacific. It also aims to generate a net return in the mid-teens and a double-digit distribution yield to investors.

Private credit is a type of debt negotiated between non-bank lenders and companies that are often below investment grade and unlisted. It flourished after the global financial crisis, when banks cut lending as they feared they would not be able to recover the loans.

Since 2009, the global private-credit market has grown more than 10 times, with estimates of the assets under management ranging from US$1.7 trillion to US$3 trillion as at end-2024.

Chi Kit Chai, SeaTown’s chief investment officer, said: “As markets evolve, private credit plays an increasingly important role in providing income-generating assets with built-in downside protection.”

“Our private credit strategy’s continued success reflects the strong conviction we share with our investors – that Asia Pacific offers a uniquely attractive landscape for performing credit,” he added.

In June, market players including law firm Clifford Chance, told The Business Times that they are optimistic for a positive 2025 in the Apac private-credit fundraising as the asset is drawing more investors within and outside the region. Clifford Chance is the lead fund counsel for SeaTown’s third private credit fund.

Last year, Apac-focused private-credit fundraising hit almost US$5.9 billion across 33 funds, 7.5 per cent higher than the US$5.5 billion raised from 32 funds in 2023, Preqin Pro data indicated.

Still, recent reports indicate there may be some bumps on the fundraising trail.

SeaTown’s announcement comes two days after BlackRock reportedly paused fundraising earlier this year for its latest Asian private credit strategy, amid its merger with HPS Investment Partners. BlackRock was aiming to raise about US$1 billion for the fund, its third.

The world’s largest asset management firm, BlackRock had set its first firm-wide target for private market fundraising at US$400 billion by 2030.

SeaTown’s second private credit fund raised US$1.3 billion at its final close in August 2024. Its first fund secured US$1.2 billion.