At the Private Debt Investor Korea Forum, Young Hwan Kim, head of alternative investment at the Government Employees Pension Service, said Korean limited partners are increasingly turning to credit secondaries to manage exposure in a volatile loan market. He argued the approach offers liquidity and a way to recycle capital without committing to new issuances and enhance portfolio resilience overall.

Credit secondaries involve purchasing existing loan portfolios from banks or other investors, allowing buyers to acquire assets at a discount while sellers obtain cash quickly. Korean pension funds, which together manage assets exceeding $300 billion, have faced tightening credit conditions and heightened default risk, prompting a search for strategies that preserve returns. Such purchases also help diversify exposure across sectors and geographies.

The shift signals a broader appetite among Asian institutional investors for secondary market solutions that can smooth portfolio volatility. As more LPs allocate capital to these deals, managers of credit secondaries may see fee pressure ease and deal flow intensify, reshaping the region’s private debt ecosystem. Investors will monitor pricing trends closely as competition intensifies and assess impact on returns.