(May 8): Singapore-based firm Granite Asia has engaged the private banking arm of DBS Group Holding Ltd to raise additional capital for its first private credit vehicle, people familiar with the matter said.
Access to the fund, which reached its first close last year, was recently made available to wealthy investors via DBS Private Bank, the people said, who asked not to be identified discussing private matters. It targets an internal rate of return of about 16% to 20% per year, with investor cash yields of about 8% to 10%, according to a document seen by Bloomberg News.
Granite’s latest effort will serve as a fresh gauge of appetite among Asia’s wealthy investors for private credit — a US$1.8 trillion ($2.3 trillion) asset class that has been shaken globally by high-profile defaults and heavy redemption requests in the US. While Asia has remained relatively insulated, concerns still rippled through the region earlier this year, prompting private bankers in Hong Kong and Singapore to reassure clients.
The strategy is structured as a closed-ended vehicle, meaning investments are illiquid, with no redemption rights and limited transferability during the fund’s term, according to the document. It also requires a long-term commitment with no certainty of return, the document added.
DBS Private Bank’s high-net-worth clients and family offices will be able to access to the fund, said James Tan, group head for investment product and advisory at the bank.
Granite’s push follows a similar move by Singapore-based firm SeaTown Holdings International, a unit of sovereign wealth fund Temasek Holdings Pte, which raised around US$180 million through DBS Private Bank for its third private credit fund. Clients must hold at least US$5 million in assets to qualify for such an account at the financial institution, according to its website.
See also: Global watchdog FSB unveils action plan on private credit risks
Last year, Granite — the re-branded Asian business of US venture capital firm GGV Capital — secured more than US$350 million in anchor commitments for the fund’s first close and is targeting total capital of US$500 million.
Proceeds raised will be deployed across roughly 20 to 30 deals, each capped at 10% of the fund’s size, according to the document. The deals will be in the form of hybrid capital, combining secured lending with upside participation, the document added.
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