A record number of Japanese investors are putting their money into domestic private credit deals in search of higher returns in the world’s last major holdout for negative interest rates.
An unprecedented 236 limited partners — including pension funds, insurers and regional banks — have provided money to private capital managers this year through September, more than triple the level of 2017, data compiled by Preqin show.
The surge in the number of investors reflects potential returns of around 10%, compared with benchmark Japanese debt yielding less than 1%, and currency hedging costs that can wipe out income on overseas debt like U.S. Treasurys.