Scale and growth: Why KKR sees Asia Pacific and Australia as the next big opportunities

This interview was filmed on 24 November 2025.

In the current investing landscape, you'd be hard pressed to find a sector offering as much potential opportunity as either the Asia Pacific region and private credit.

And the two combined present a compelling opportunity for investors looking to diversify into an impressive growth story, says KKR's Head of Asia Credit and Markets Diane Raposio.

"Asia Pacific is one of the fastest-growing regions in the world with two-thirds of global GDP growth," says Raposio, "but actually it has the smallest proportion of private credit AUM - less than 5%."

KKR has more than 20 years of experience investing across the credit spectrum. The platform spans senior lending to corporate borrowers supported by cash flows, capital solutions for companies that need flexible financing, and a broad suite of capabilities in asset-based finance (ABF).

The opportunity in Asia Pacific

There are two key areas driving the growing opportunity in private credit in the APAC region: the continued growth of private equity sponsors in the region and corporate finance needs.

"We are really focused on helping quality companies scale."

Behind the growth there's also a few key tailwinds.

"A real tailwind for the Asia Pacific region is we are seeing more intra-regional trade," said Raposio. "That has been a key area and that will continue to help Asia Pacific decouple from the US and European markets."

One notable trend they have been watching closely this year is the resurgence in M&A.

M&A plays a crucial role in the financing market and the lack of activity in recent years has contributed to the growing supply/demand gap for investors, ultimately contributing to tightening spreads. 

In terms of what sectors are offering the best opportunities, Raposio says it's what KKR call "local for local" - local companies servicing local markets.

This covers domestic consumption and business services, as well as healthcare, pharmaceuticals, education and training, and other essential services.

Another key area of growth is asset-based finance and companies that historically self-funded business activities. That includes equipment leases, data centres, renewables and companies with contracted cash flows.

The opportunity in Australia

Mitigating the risks

KKR is "a hundred percent focused on capital preservation," says Raposio, and is therefore highly cognisant of the risks that do present themselves in private credit.

Some are high-level considerations. "We're very focused on macro risks, liquidity, foreign exchange enforcement, so those are always the parameters that go into every investment," she says.

And others are more specific. While they focus on diversification when building a portfolio, part of that means knowing which sectors to avoid in order to provide the best risk-adjusted returns.

"We have tended to avoid commodities and energy, because those cycles can be extremely volatile, other highly-cyclical sectors and those with a lot of CapEx, and also export-driven businesses, which are exposed to geopolitical or tariff risks."

Clearing the air

Private credit has attracted its share of headlines recently, and in September, ASIC released a report into the Australian private credit industry calling for greater transparency.

But Raposio believes there are two common misconceptions surrounding the sector. "The first one is the myth that private credit is a bubble or systemic risk," she said. "We don't see that." 

"What's very important to understand about private credit is we don't take short-term deposits, which is a key distinction from banks."

"So the bulk of the market is made up of closed end or permanent capital vehicles, and have conservative leverage. We are lending at a very similar tenor to the capital that we manage."

Another misconception, Raposio says, is that valuations in private credit are more systematic than investors perhaps think.