Institutional investors are showing an interest for emerging market private credit as developed markets face higher scrutiny over rising default rates and redemption pressures, a new study from investment firm Gemcorp Capital shows.
According to a Gemcorp survey among 250 senior institutional investors, conducted in the first quarter of 2026, 42 per cent of respondents plan to invest more in emerging markets over the next two years, outpacing every other region.
Together the respondents manage roughly $21tn (£16tn) in assets under management across North America, Europe, Asia-Pacific, Latin America, the Middle East and Africa.
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The findings suggest investors are considering emerging market private credit as a way to broaden portfolio exposure as well as a route to higher yields. More than half of respondents (52 per cent) expect emerging market private credit to deliver annualised returns of 11 to 15 per cent over the next five years, compared with only roughly eight per cent for developed markets.
“If those expectations are met, this performance gap could support a broader reallocation of capital towards emerging markets,” Gemcorp argues.
Previously, Gemcorp’s 2025 emerging market private credit study also indicated that 90 per cent of investors expected growth in emerging market private credit to accelerate or remain stable over the following five years.
Felipe Berliner, co-founder and head of structuring at Gemcorp, which focuses on emerging market private credit, said institutions are right to question whether the risk-return equation has shifted.
“Emerging market private credit has become a compelling part of that conversation for investors prepared to look beyond crowded developed markets,” he said.
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Still, despite high confidence in returns, emerging markets currently make up just 5.8 per cent of average portfolios and 40 per cent of respondents admitted having no current emerging markets allocation at all. For instance, in North America only 25 per cent of investors plan to increase allocations to emerging market private credit over the next two years.
Gemcorp notes that the gap between appetite and allocations suggests emerging market private credit has room to grow. “As institutions deepen their understanding of the asset class, assess specialist managers and become more comfortable with risk mitigants, growing confidence could help translate interest into meaningful allocation growth,” the firm concluded.
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