China’s credit market opportunities, particularly distress-related opportunities, have increased manifold and continued to grow. The country’s decelerating economic growth, misallocations of capital, and the natural evolution of an emerging credit system all contribute to a credit market that is laden with attractive private credit opportunities. As China comes to terms with the consequences of its unprecedented 2008-2010 lending binge, and the subsequent shadow banking credit expansion, loan repayment capabilities are being increasingly brought into question and the amount of NPLs in China has been growing at an alarming rate every quarter since 2014.
In this environment, the universe of investment opportunities has expanded rapidly across all areas of our core competencies, including NPLs, asset-backed lending, and other structured credits investments. In view of the evolving market, ShoreVest has been mindful in sharpening its debt resolution skills, which are fundamental to underwriting. When sourcing deals, ShoreVest is active in exploring innovative approaches to work with NPL sellers, focusing on securing deals at value pricing, while also providing sellers with solutions. To scale ShoreVest’s workout capability, ShoreVest allies with quality local servicers who have a proven work ethic, integrity, and a strong debt resolution track record.
As the debt capital markets further develop, opportunities across the risk curve will continue to emerge, including bond market investments, venture debt, mezzanine debt, cash flow lending, and consumer credit. ShoreVest is well positioned to predictively source and participate in all of these opportunities over time as they emerge.