Elham Credit Partners, the private credit arm of Hillhouse Investment, has partnered with Digital Climate Group, a Daiwa Securities Group-backed digital investment bank, to explore private credit opportunities in the Asia Pacific region, with an initial focus on Japan. The collaboration targets the country's emerging midmarket sector and aims to expand to cross-border deals in the Middle East and Asia.
Elham Credit Partners, the private credit arm of Hillhouse Investment, has announced a partnership with Digital Climate Group, a digital investment bank backed by Daiwa Securities Group. Under this agreement, Digital Climate Group will source private credit deals in Japan for Elham, initially focusing on the country's emerging midmarket sector. The companies stated in a Tuesday announcement that they also plan to pursue cross-border opportunities in the Middle East and across Asia.
The collaboration comes as Elham joins global players like Apollo Global Management, Blackstone, and KKR in seeking a foothold in Japan's lending market. These firms are betting on a surge in demand for private credit, though penetrating the world's third-largest economy remains challenging due to stiff competition from traditional bank lenders.
In September, Daiwa made an undisclosed investment in Digital Climate Group, with the aim of addressing financing gaps for impact-driven projects in Asia and the Middle East, according to a joint statement at the time. Separately, Elham is raising between $700 million and $750 million for the first close of its inaugural private credit fund.
This partnership could help accelerate growth in Japan's private credit market, but it will likely require a long-term strategy amid established banking dominance.