Private credit has moved firmly into the mainstream. What was once a niche corner of institutional finance – accessed only by pension funds and sovereign wealth funds – is now one of the most discussed asset classes among high-net-worth individuals worldwide. For expat investors in particular, it represents a meaningful opportunity to build structured, recurring income outside the traditional banking system.

But with opportunity comes complexity. The private credit landscape is evolving fast, and not all products carry the same risk profile, liquidity terms, or suitability for individual investors. This guide breaks down what private credit is, how it works, and what expat investors need to understand before allocating to it.

What Is Private Credit?

Private credit refers to loans and debt financing provided by non-bank lenders – typically asset managers, credit funds, and specialist investment firms – directly to companies or projects. Unlike publicly traded bonds, these instruments are not listed on exchanges. They are negotiated privately between lender and borrower, which is where much of their appeal lies.

The asset class grew significantly in the aftermath of the 2008 financial crisis. As banks pulled back from certain types of lending due to tighter regulation, private credit stepped in to fill the gap. Banks financing private equity takeovers had to change their approach – they were no longer permitted to underwrite deals with certain levels of leverage, which left an opening for private credit to work directly with private equity and corporate borrowers.

The result was a sector that has grown to a $2 trillion industry, touching everything from mid-market corporate lending to real estate debt, infrastructure financing, and specialty finance.

Why Are Expat Investors Paying Attention?

For expats – particularly those based across Singapore, Hong Kong, the UAE, and the Gulf region – private credit addresses a specific problem: how to generate consistent, yield-bearing income in a currency-stable structure, without the volatility of public equity markets or the negligible returns of bank deposits.

“The promise was better returns than high-yield bond or leveraged loan markets, alongside bespoke loans where lenders controlled the terms – which made them, in theory, safer.”
– Eric Platt, FT US Investment Editor

For investors seeking predictable income, that combination has historically been compelling. Well-structured private credit programmes have delivered consistent returns across interest rate cycles, and for expats managing cross-border tax exposure, the income profile – typically distributed on a regular schedule – offers planning clarity that volatile assets cannot.

There is also a structural argument. Europe’s classic motor of investment – bank financing – is not up to the task of funding growth and risk-taking at the scale required, and it is well accepted that more productive deployment of private capital is needed. The same logic applies globally. Banks remain conservative. Private credit fills the gap, and investors who fund that gap are compensated accordingly.

How Private Credit Generates Returns

Private credit funds typically earn income through two primary mechanisms: interest payments on loans, and arrangement or origination fees collected at the point a deal is structured.

Interest rates on private credit are higher than bank debt, reflecting the illiquidity premium investors accept in exchange for locking up capital. Private credit typically costs three to four times as much as bank debt – a premium that flows directly through to investor returns.

For investors in structured income programmes, returns are generally distributed as regular income rather than accumulated and paid at exit. This is the foundation of the alternative income model that has attracted significant capital from the HNW segment: predictable distributions, backed by a portfolio of loans with defined maturity dates.

Understanding the Risks

Private credit is not without risk, and investors should approach it with clear eyes. Three areas warrant particular attention.

Liquidity

Private credit is an illiquid asset class by design. Capital is typically locked up for a defined period – often three to seven years – and early redemption options are limited. Private credit was built on a clear premise: long-term capital funding illiquid assets, with limited need for short-term liquidity. This is precisely what has allowed it to deliver relatively stable outcomes over time. Investors who treat it as a liquid holding run into problems. Those who understand the structure and commit accordingly do not.

Credit Quality

Not all private credit is the same. The quality of the underlying borrowers, the structure of covenants, and the degree of security attached to loans varies considerably between funds and programmes. Due diligence on the underlying loan book matters. The key questions: what sectors are you lending into, what is the average leverage ratio, and what covenants protect the lender if a borrower deteriorates.

Structural Mismatch

“The industry’s move to broaden access through semi-liquid structures is conceptually appealing but practically problematic. It introduces periodic liquidity on top of assets that cannot be readily liquidated in stressed conditions.”
– Patrice Mesnier, Founding Partner, Oldenburg Capital Partners

The key question for any investor is whether the liquidity terms of the product they are entering genuinely match their own time horizon. If they do, the structure works as intended.

What Makes a Well-Structured Private Credit Programme?

For expat investors specifically, the characteristics of a sound private credit programme come down to four things.

–Transparency on the underlying loan portfolio. You should understand what sectors you are lending into, the credit quality of borrowers, and average loan-to-value or leverage ratios.

–Defined liquidity windows that match your planning horizon. A three-year or five-year lock-up with defined distribution intervals is workable. Open-ended structures with unclear redemption mechanisms are not.

–Currency and domicile alignment. For expats managing tax residency across multiple jurisdictions, the structure through which a programme is accessed – onshore versus offshore, SPV versus fund vehicle – carries real implications.

–A manager with a clear track record and operational credibility. Experience managing distress across a full credit cycle is a feature, not a red flag.

The Expat Opportunity: Asia and the Gulf

The conversation around private credit investment for expats is particularly active across Asia and the Gulf. Both regions have large concentrations of HNW individuals managing significant investable assets outside their home tax jurisdictions, with a strong preference for yield-generating structures over speculative growth plays.

In Asia – across Singapore and Hong Kong in particular – private markets allocations among family offices and sophisticated individuals have grown steadily, driven by access to regional deal flow and the maturation of local fund infrastructure.

In the Gulf, the backdrop has added urgency. UAE authorities have privately indicated they will allow expats to spend more time abroad without losing their tax status, as the country tries to incentivise residents who left following the Iran conflict to return. For investors with Dubai-based tax residency structures, this context matters. But the broader point is unchanged: expats in the region have significant capital seeking structured, yield-bearing homes that sit outside bank deposits and volatile public markets.

Private credit – when accessed through a properly structured programme, with appropriate due diligence – is one of the strongest answers to that need.

How Carey Suen Approaches Private Credit

At Carey Suen, we work exclusively with HNW expat investors across Singapore, Hong Kong, the UAE, and Saudi Arabia. Our structured income programmes provide access to private markets strategies with defined return targets, regular income distributions, and clear liquidity terms – built for investors who understand that meaningful returns require a long-term view.

If you are evaluating private credit as part of your portfolio, or want to understand how our programmes work in practice, speak with our team directly.

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This article is for informational purposes only and does not constitute financial advice. Private credit investments carry risk, including the potential loss of capital. Speak with a qualified adviser before making any investment decision.