CMBI, a wholly owned subsidiary of China Merchants Bank (CMB), and Australia-listed alternative asset manager MA Financial Group have announced the signing of a general partners agreement to jointly manage the MA CMBI APAC Credit Opportunities fund.

The fund, structured as a Cayman limited partnership, will provide institutional and ultra-high-net-worth investors worldwide with access to Asia Pacific’s private credit market by focusing on senior secured leveraged loans to sponsor-backed corporate borrowers in the Asia Pacific region.

CMBI APAC Credit Opportunities Fund GP and MA Investment Management Pty Ltd will be the co-general partners of the fund, to be managed by CMBI’s asset management entity in Hong Kong and MA Financial’s asset management team in Sydney and Singapore.

The fund is targeting a size of $600m of investments (including equity commitments of approximately $250m) and an internal rate of return of 9 – 11% (before fees), according to a statement.

“Launch of the Fund is at advanced stages with attractive seed investments secured, a deep visible pipeline identified, NAV financing is being arranged from a major global commercial bank, and the first LP commitments secured, the statement said.

 Jianjun Huo, CMBI’s chief executive officer, said: As the Asia-Pacific region continues to drive global economic growth, its private credit market stands out as one of the world’s fastest-growing and most dynamic segments, fueled by structural demand for flexible, non-bank financing.”

Andrew Martin, MA Financial’s head of asset management said: “Private credit is a maturing asset class across the Asia Pacific region supported by strong growth drivers.”

“For investors, Asia Pacific private credit presents a unique opportunity particularly as a diversifier for portfolios concentrated towards US and European private credit markets,” he added.