CK Asset’s Orion3 Seeks to Raise Up to $1B for Private Debt Fund With Muzinich

Orion3, a fund manager backed by Hong Kong property giant CK Asset Holdings, has teamed with Manhattan-based Muzinich & Co on an infrastructure and real assets private debt strategy targeting a size of between $500 million and $1 billion.

The fund has raised more than $120 million in seed capital and will focus on providing debt financing and capital solutions for middle-market infrastructure and real asset companies, the partners said Monday in a release.

The strategy will draw on the private debt expertise of Muzinich, which manages $35.7 billion in fixed-income credit assets, and the infrastructure and real estate experience of CK Asset, the HKEX-listed developer controlled by Hong Kong’s richest man, Li Ka-shing.

“Real asset markets globally are primed for alternative capital solutions providers to bridge the funding gaps from the traditional banking system,” said Orion3 co-founders Rowena Chu and Harry Chang. “Our unique partnership will offer investors a differentiated value proposition to the growing capital demand in the region.”

Supporting Green Transition

The private debt strategy will have an initial focus on opportunities in Australia, Singapore, South Korea, Japan, Hong Kong, Britain and Canada. The fund will also have the ability to opportunistically invest in deals in Southeast Asia, the Middle East and the EU.

A key theme will be to support businesses and projects in their energy and climate transition as the world moves towards net-zero emissions, the partners said. They cited a report by the Asian Development Bank stating that the APAC region requires $1.7 trillion in annual investment to meet its development and climate needs.

“Globally, we are at an inflection point, where significant capital must be deployed to support much needed infrastructure development in critical areas such as renewable energy, utilities and energy transportation, telecoms, digital infrastructure and real estate,” said Andrew Tan, APAC CEO at Muzinich & Co. “Finance from credit investors has a major role to play in this transition.”

Orion3 is chaired by 20-year Deutsche Bank veteran Chu, while Chang, most recently a managing director at medical group New Frontier Health Corp, serves as president and chief financial officer.

Muzinich & Co was founded in 1988 as a financial firm specialising in public and private corporate credit. Led by Justin Muzinich, a former US Treasury official and the son of founder George Muzinich, the firm operates 15 offices across the US, Europe and Asia, including in Hong Kong, Singapore, Sydney and Tokyo.

Direct Lending Boom

Private credit as an asset class has nearly doubled in size in Asia Pacific over the last five years, according to data provider Preqin.

SeaTown, a unit of Singapore government investor Temasek Holdings, announced last month the $1.3 billion final closing of its second private credit fund targeting APAC. In July, SeaTown owner Seviora agreed to take a minority stake in Hong Kong-based private credit fund manager ADM Capital to capitalise on opportunities in the middle-market segment.

Hong Kong private equity firm PAG is said to be targeting $2.5 billion for its sixth APAC direct lending fund, while Los Angeles-based Ares Management in February raised A$2.6 billion for its Ares Asia Direct Lending fund, which invests in Australia and New Zealand.

In May, Goldman Sachs hit a final close of West Street Real Estate Credit Partners IV and related vehicles with over $7 billion of lending capacity to deploy globally, including in APAC. That milestone came two months after Goldman and Abu Dhabi sovereign giant Mubadala formed a $1 billion partnership to invest in APAC private debt plays, including in real estate.

In February, Paris-based Tikehau and UOB-Kay Hian, the brokerage arm of Singaporean financial services firm UOB Group, announced a partnership to jointly launch an APAC private credit strategy focused on providing financing to mid-sized corporates across the region. Temasek held a 4.5 percent interest in Tikehau as of December.