Bain Capital has played down concerns about systemic risk in the booming private credit market, arguing that while conditions have become “a little frothy,” the asset class remains fundamentally sound, according to sources cited by Bloomberg.

Jeffrey Hawkins, the firm’s deputy managing partner for credit and special situations, said that private credit is not showing signs of structural weakness, despite recent defaults among smaller US borrowers. “Our view is that there is nothing systemically wrong with the market,” Hawkins told Reuters during Hong Kong’s Global Financial Leaders’ Investment Summit.

He acknowledged that an influx of new capital into the market is increasing pressure on lenders to deploy funds quickly, sometimes with weaker diligence and tighter spreads. However, Hawkins said most vulnerabilities stem from asset-liability mismatches rather than credit quality.

Bain Capital, which manages around $58bn in credit assets, is increasingly focused on Asia, where private credit remains underdeveloped relative to the US and Europe. “Relative to the U.S. and Europe as a whole, though there are caveats, the clear winner globally, from a growth perspective, is Asia,” Hawkins said.

The firm is currently raising an Asia direct lending vehicle and its third Asia special situations fund, targeting hybrid debt and equity opportunities. Hawkins said Australia and India are key markets for Bain’s Asia lending strategy, driven by demand for flexible capital solutions.

He added that insurance investors, among the biggest allocators to private credit, are well-positioned to absorb exposure to the asset class given their long-term balance sheet structures.

Bain’s outlook aligns with a broader trend among global private credit managers seeking expansion in Asia, where traditional bank lending remains limited and financing needs are growing rapidly across mid-market corporates.

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