As the private credit boom is hitting a major speed bump, the ripples are being felt from Wall Street to Asia.

The private credit slowdown intensified sharply in April as US Business Development Company (BDC) fundraising plunged to its lowest monthly total since mid-2023. According to Robert A. Stanger & Company, a consecutive monthly slide has dragged year-to-date inflows down 52% to US$10.8 billion. 

While the data isolate a cooling US market, Asia is not immune to the private credit retreat, although the exact scale of regional redemptions remains shielded by a lack of public disclosure.

As money flows out of private credit, Anastasia Amoroso, managing director and chief investment strategist for Partners Group’s private wealth and retirement business, has seen that private wealth investors are looking for every allocation opportunity, with interest expanding beyond real estate, private credit, and private equity.  

She noted that AI energy demands and Middle East tensions have driven interest in resilient infrastructure, while royalties are gaining traction for providing a unique mix of growth, income, and low market correlation, adding that there have been “a lot of conversations” with clients in Asia around royalties, without divulging the Q1 inflows. 

“I would say here in Asia, royalty does represent a significant reallocation, because as rates are poised to fall still in the United States, that’s why some of that reallocation has been going into royalties,” she said.

Amoroso explained that royalties could serve as an income-focused allocation that targets a 10% net return per annum, and a 4-6% distribution yield per annum. While they lack significant upside because they are typically held rather than sold, she emphasised their value in portfolio construction, noting that royalties offer low correlation to traditional assets, effectively smoothing out market volatility.

This rising interest in royalties mirrors the growth at the Baar, Zug-headquartered global private markets firm, which saw its royalties AUM surge from US$0.2 billion to over US$1 billion, while its dedicated team expanded from 15 to 25, according to its 10 March 2026 Capital Markets Day release.

Intertwined: Software and private credit

This asset rotation is being heavily steered by shifts in technology and geopolitics, with artificial intelligence now dominating client discussions.

“I think one of the top questions for everybody right now is AI disruption. It feels like more and more investors are realising how massive this is. Six months ago, I was being asked if there was an AI bubble; now, I don’t get that question at all,” said Amoroso, adding that investors are now shifting from bubble fears to navigating disruption. 

She warned that concerns over AI’s impact on software are triggering a chain reaction of anxiety regarding private credit and potential redemptions.

“Software and private credit have become intertwined. Software — the poster child for agentic AI disruption — represents about 20% of private credit allocations. It has become fashionable to worry about private credit because of this, but as investors, we need to perform deeper due diligence on what is actually at risk,” said Amoroso. 

Only SaaS faces real disruption

She dismissed systemic risk concerns, explaining that evergreen funds use multiple backstops — including natural loan repayments, liquid reserves, and credit lines — to meet withdrawals without forcing asset sales. From a macro perspective, she noted that private credit fundamentals remain sound, driven by declining interest rates, improved coverage ratios, and stronger equity cushions.

“If you look at EBITDA revenue growth for a lot of the middle market loans, they are running somewhere between 6% and 8% positive. So from a macro perspective, and given our outlook for strong economic growth still, we don’t see risks to private credit,” she added. 

Amoroso argued that headlines oversimplify the threat of AI, noting that only horizontal Software-as-a-Service (SaaS) applications are truly at risk of disruption — representing just 7% of private credit exposure rather than the reported 20%. She noted that over time, expanding AI disruption will likely fragment market returns, making strict manager selection vital for private credit investors.

Malaysia, Thailand, and Taiwan 

As regional wealth clients re-evaluate their portfolios amid these macro shifts, Partners Group is widening its market access through key local banking alliances.

Most recently, Partners Group has tapped Bank of East Asia for its first Hong Kong distribution partnership, expanding its private wealth reach in the city. The partnership will give BEA’s wealth management and high net worth clients access to a selection of Partners Group’s private markets investments. 

“We just launched a partnership in Malaysia recently, and a partnership in Thailand last year. We are starting to do some work in Taiwan,” said Henry Chui, head of private wealth APAC, Partners Group, in the interview, adding that Hong Kong, Singapore, and Japan would remain the core and largest accessible markets.