The Complete Guide to Private Credit Investing in Singapore

Reliable income is harder to come by in today’s low-yield world. As traditional bank lending becomes increasingly restrictive, both businesses and investors are turning to new solutions. Enter private credit—a dynamic asset class where non-bank lenders provide tailored financing to companies, often small and mid-sized enterprises shut out by mainstream banks.

For high-net-worth individuals and family offices, private credit is no longer just a niche alternative. It’s now a mainstream part of private wealth management, offering higher yield potential, lower correlation with public markets, and steady cash flows through regular repayments. By lending directly to companies, investors can diversify their portfolios and tap into risk-adjusted returns that often outperform traditional fixed income.

As the global private credit market continues its rapid growth in 2025—driven by investor demand and changing economic realities—understanding how this asset class works, the opportunities it brings, and the risks it carries is more important than ever. 

This guide covers all you need to know about private credit investing, from its fundamentals to practical steps for getting started.

What is private credit?

Private credit refers to lending by non-bank institutions—such as private funds, asset managers, and insurance companies—directly to businesses outside public markets. Unlike public bonds or syndicated loans, these are privately negotiated loans, often customized for the unique needs of the borrower. 

Key features include illiquidity (longer lock-ups in exchange for higher potential returns), bespoke loan terms, floating interest rates, and stronger covenant protections for lenders.

The global private credit market continues to expand, fueled by lower interest rates, improving credit quality, and robust economic growth in the US and Europe. Assets under management are on track to reach $3 trillion by 2028 according to research, reflecting even stronger momentum than in recent years. 

As businesses increasingly seek alternatives to traditional bank financing, and investors pursue higher, risk-adjusted returns, private credit is becoming a central component in modern portfolios.

Basics of private credit 

Participants in private credit

Investors

Institutional and high-net-worth investors are drawn to private credit for its stable cash flows, lower volatility, and tailored investment strategies. Tax-efficient structures and access to higher-yielding, asset-backed deals make this asset class attractive for those seeking alternatives to public markets.

Originators

Banks and non-bank lenders originate loans but often lack the capacity to hold them long-term. By partnering with private credit managers, originators can transfer risk, access stable funding, and grow their lending business without overextending their balance sheets.

Borrowers

Companies turn to private credit for flexibility—benefiting from customised loan terms, competitive pricing, and reliable access to capital, even during market stress. Borrowers value the speed and collaborative approach that private credit lenders can provide.

Why invest in private credit?

Private credit offers investors a distinct combination of higher returns, diversification, and structural protections that set it apart from traditional fixed income.

Higher yields and income generation

Private credit typically delivers higher yields than traditional fixed income investments such as government or investment-grade corporate bonds. This is due to the risk premium associated with lending to non-investment grade or mid-sized companies, as well as the illiquidity premium for holding non-traded assets. According to research,  private credit is currently delivering a compelling double-digit yield of 10.15%, standing 2.26 percentage points above the yield offered by comparable B-rated public loans—highlighting its distinct income advantage.

Portfolio Diversification

Historically, private credit has played a key role in enhancing returns, lowering portfolio volatility, and increasing income potential for investors. 

These qualities make it especially appealing for those looking to protect and grow their wealth during periods of market uncertainty, persistent inflation, or shifting interest rates. As a result, private credit is increasingly recognised as a strategic component in modern, diversified portfolios.

Downside Protection and Resilience

Private credit loans are often senior in the capital structure, secured by collateral, and have negotiated covenants that provide additional protection in case of borrower default.

Notably, private credit has historically outperformed other fixed income assets across different interest rate cycles according to research, all while exhibiting lower volatility. It has also recorded lower loss ratios than high-yield bonds, and its illiquid nature allows managers more time and flexibility to restructure troubled loans—often resulting in stronger recovery outcomes.

Floating Rate Structures

Most private credit loans have floating interest rates, which protect investors from rising interest rates. As rates increase, so do the interest payments, helping to preserve the real value of returns.

Flexibility and Customization

Private credit lenders can tailor loan terms to meet the specific needs of borrowers, offering more flexibility than traditional bank loans. This includes structuring repayment schedules, covenants, and collateral arrangements that are not typically available in public markets.

Access to Sectors and Borrowers Overlooked by Banks

Private credit fills financing gaps left by traditional banks, especially for mid-sized companies, specialty finance, and distressed situations. This allows investors to access opportunities in sectors or companies that might otherwise be underserved.

Lower Systemic Risk

Unlike banks, private credit funds do not face on-demand redemptions, reducing the risk of liquidity crises or bank runs. This structure makes the broader financial system more stable by limiting leverage and systemic fragility.

Shorter J-Curve and Faster Return of Capital

Compared to private equity, private credit investments typically have a shorter duration and return principal more quickly due to regular interest payments and defined maturity dates.

Private vs. public credit investing

Public credit investments generally offer more liquidity than private, but investment options are much more limited. Private credit may offer higher yields and more flexible deal terms, but this comes at the expense of liquidity and transparency. Here’s how public and private credit differ:

Private credit is more than direct lending

While direct loans to businesses form the core of the market, private credit spans a wide array of investment strategies—each offering unique risk, return, and collateral profiles. From asset-based finance to infrastructure debt, these strategies allow investors to tailor exposures beyond what’s available in traditional credit markets.

Who can invest in private credit in Singapore?

Private credit investing in Singapore has historically been open mainly to institutions and wealthy individuals. However, regulatory changes are beginning to broaden access, making this asset class increasingly relevant for a wider range of investors.

1. Accredited Investors

Accredited investors enjoy the broadest access to private credit funds, platforms, and bespoke products. To qualify, individuals must meet at least one of several criteria set by MAS: 

• Net personal assets exceeding SGD 2 million (with only 50% of a primary residence counted toward this threshold)
• Annual income of at least SGD 300,000
• Financial assets over SGD 1 million

Accredited status also extends to joint accounts held with an accredited investor. This group can participate in a wide range of sophisticated and higher-risk private credit strategies not available to the general public.

2. Institutional Investors

Institutional investors—such as pension funds, insurance companies, sovereign wealth funds, and endowments—have full access to private credit opportunities. 

These entities typically invest at larger scales, enabling them to participate in direct lending, co-investments, and tailor-made mandates. Their size and expertise allow them to negotiate bespoke deals and capture a broad range of private credit exposures.

3. Retail Investors

Until recently, retail investors in Singapore have had very limited access to private credit due to regulatory restrictions and product suitability standards. However, the Monetary Authority of Singapore (MAS) is rolling out new frameworks—such as the Long-term Investment Fund (LIF)—to allow retail participation in private markets, including private credit, through authorized funds. 

Once these new rules are implemented, retail investors will be able to access private credit under enhanced safeguards and disclosure requirements.

4. Foreign Investors

Foreign investors face no major barriers to investing in or providing private credit in Singapore, as long as they comply with all relevant local regulations and tax requirements.

They should be aware that interest income may be subject to withholding tax unless reduced by tax treaties.

How to invest in private credit in Singapore?

Singapore offers multiple pathways to access private credit investments, catering to different investor profiles, risk appetites, and liquidity preferences. Whether you’re an accredited investor, institutional client, or retail participant, here’s how you can participate in this asset class:

1. Digital wealth platforms

Digital wealth platforms have simplified access to private credit, especially for accredited investors. For example, StashAway Private Credit offers exposure to senior secured private debt funds managed by established names like Hamilton Lane. 

These products feature open-ended structures, monthly liquidity after an initial lock-up, and require no multi-year commitments. StashAway is licensed by MAS, ensuring regulated and transparent investment processes.

2. Private credit funds and asset managers

Investors can subscribe directly to private credit funds managed by global players (like BlackRock or Hamilton Lane) or regional specialists. These funds cover a range of strategies, including direct lending, distressed debt, and specialty finance. 

3. Licensed fund managers and private banks

Private banks and wealth managers in Singapore often include private credit funds in their alternative investment offerings for high-net-worth clients. Advisory support and curated product selections are standard. 

Alternatively, investors can engage directly with MAS-licensed fund managers focused on private credit, subject to varying minimum investment sizes and lock-up periods.

Regulatory and tax considerations

The Monetary Authority of Singapore regulates all fund managers and platforms dealing in private credit. While there are no special restrictions on private credit investments, regulated entities must comply with reporting and compliance standards. 

Taxation is another consideration: interest paid to foreign lenders is generally subject to a 15% withholding tax unless treaty exemptions apply. Domestic investors should also consider how fund structures might impact overall tax efficiency.

Investing in private credit through StashAway

StashAway’s private credit solution is designed to give investors institutional-quality access to a traditionally exclusive asset class—without the usual high barriers or lack of flexibility.

1. Curated access to leading global managers

StashAway partners with top-tier global private markets specialists like Hamilton Lane to offer exposure to diversified, senior secured private debt funds. 

Investors gain access to opportunities that are typically reserved for large institutions, private banks, or ultra-high-net-worth individuals.

2. No multi-year lock-ups, flexible liquidity

Unlike traditional private credit funds, StashAway Private Credit features an open-ended structure. After a short initial lock-up period, investors can redeem their investments monthly, allowing far greater flexibility than is standard in the industry.

3. Risk management and transparency

The strategy focuses on senior secured debt—loans with the highest priority in a borrower’s capital structure and backed by collateral—helping to provide capital preservation and more predictable income. 

All investments are managed and monitored by regulated, experienced professionals.

4. Seamless, digital experience

With StashAway, the entire investment process—from onboarding to monitoring—is digital and user-friendly. Investors enjoy clear reporting, simple account management, and the ability to track portfolio performance 24/7 through the StashAway app.

5. MAS-regulated and secure

StashAway is fully licensed by the Monetary Authority of Singapore, offering peace of mind that your investments are managed according to the highest standards of compliance and governance.

*StashAway Private Credit is only available to Accredited Investors

Things to note about private credit investing

Illiquidity and the illiquidity premium

Private credit investments are typically much less liquid than public bonds or listed assets. These loans and funds are not traded on public markets, making it harder to exit positions quickly.

In return, investors benefit from an “illiquidity premium”—higher yields that compensate for the lack of immediate liquidity and the longer investment horizon.

The importance of manager selection

Because many private credit borrowers may have weaker credit profiles than traditional bond issuers, rigorous credit assessment is critical. The experience, track record, and risk management practices of a fund manager are often the biggest factors in investment outcomes. Careful manager selection can help mitigate credit risks and protect against losses.

Unique risks in private credit

While private credit offers attractive yields and diversification, it carries distinct risks:

• Limited Transparency & Oversight: Private credit deals are often less transparent and more lightly regulated than public credit markets, making independent monitoring more challenging.
• Bespoke Structures: Each deal may be highly customized, which can introduce legal, regulatory, or structural risks—especially if there are changes in laws or regulations affecting the investment.
• Tax Considerations: Many private credit investments use tailored structures to optimize after-tax returns. These arrangements require ongoing management and vigilance to avoid costly errors that could impact returns.
• Potential Systemic Risks: As the industry grows, there is increased scrutiny on whether private credit could pose broader financial risks. Ongoing debate and evolving industry practices aim to monitor and address these concerns.

Despite these challenges, the private credit industry is actively developing new tools and practices to identify, monitor, and manage risks. As more investors, managers, and borrowers participate, the ecosystem continues to innovate and adapt, helping to build long-term resilience and support the evolution of debt capital markets.