South Korea ripe for more private credit exposure: Apax exec

Institutional investors in Korea are ramping up their allocations to private credit as they seek to broaden alternative portfolios while maintaining tighter risk control, according to a senior executive at global private equity firm Apax Partners.

Derek Jackson, partner and head of Credit at Apax, said Korean institutions are increasingly exploring private credit — debt financing provided by nonbank lenders such as private equity firms — as they look for yield and diversification beyond traditional markets.

"There has always been an appetite to understand what the opportunities are, to look for good partners globally,” Jackson told The Korea Herald in an interview held in Yeouido, western Seoul, on Wednesday, as he was visiting Korea to host the Apax Investor Day event with the firm's broader leadership team.

"That is why Korea has developed into such a sophisticated investment market and has so many people who are employed in that space," he said.

For instance, the National Pension Service, in charge of running assets of more than 1,300 trillion won ($885 billion) as of late August, officially incorporated global private credit into its investment strategy in 2019.

Though the NPS does not disclose its private credit exposure separately, the overall allocation to private equity — including hedge funds, private credit and multiasset strategies — has risen from 3.99 percent in 2019 to 7.33 percent in 2025, while more than tripling in terms of assets under management.

“(The interest in private credit) is likely to grow over time because the Korean investors have had good experiences with a lot of these asset classes," Jackson said.

Apax’s strategy to incorporate credit into its private equity business is unique, setting it apart from most of its peers in the upper-middle-market segment, according to Jackson.

Many private equity firms “wall off” their credit operations from their buyout business, treating them as independent. Apax, however, takes a complementary approach by integrating the two.

“We will give all of our knowledge to our investors and give them exposure by doing the underwriting in the style that we do it in, effectively using big firm resources to deploy and credit,” Jackson said.

"We offer a thoughtful approach and a way to get exposure to credit through the eyes and resources of a private equity firm.”

For instance, upon exit, Apax can offer tailored financing solutions to a prospective buyer to support the acquisition, leveraging its deep knowledge of the asset gained through managing it.

“There is a big difference between working with a set of investors who do not know anything about the business — that is, starting from scratch — and working with a firm that is very active in the space — investors who have owned businesses just like this and are actively looking at it and know what is going on,” Jackson said.

“It is almost a peer-to-peer type of conversation. I usually say that ‘People like to do business with people who know what they're doing.’ In this case, a well-educated creditor."

With roughly 20 years of experience in the credit space, Jackson is a seasoned expert in private credit. He has previously held chief positions at the Canada Pension Plan Investment Board and the European Credit Investment Committee. He joined Apax in 2024.