(7 October 2025 – Global) Private credit for emerging markets could grow exponentially to reallocate billions in funding for trade and investment as bilateral lending and foreign aid contract.
Driven by investors’ hunt for yields, saturation in developed Western markets and bespoke financing and repayment terms attracting corporate borrowers, emerging markets (EM) are set to capture significantly more than the current ten percent proportion they currently lure of a total estimated global assets under management (AUM) of US$1.2 trillion according to the Bank for International Settlements (BIS).
“We’re not replacing banks anymore. We’re building something that didn’t exist. This is bespoke financing for bespoke problems. That’s what EM has in abundance” stated Gramercy Head of EM Capital Solutions, Gustavo Ferraro.
“Developed market companies are going into an era they’ve never experienced before, but emerging market companies have been doing this for a long time” Ferraro added.
PIMCO has committed up to US$30 billion across 140 EM deals in five years and plans to expand annual lending by 30 percent in 2025 to US$10 billion.
“This is a paradigm shift. The need to globally reallocate is not a hedge, it’s a secular thesis” PIMCO Head of Emerging Markets Portfolio Management, Pramol Dhawan commented to Reuters.