Patria Investments announced it is preparing the next vintage of its Latin America private credit strategy, aiming to give global institutional investors exposure to what the firm describes as a large corporate credit market that remains structurally under-levered and capital-constrained. The alternative asset manager, which reported more than $60.1 billion in assets under management, said it believes a combination of limited reliable lending capacity and a persistent, perception-based regional risk premium can keep spreads elevated even when borrower fundamentals hold up, supporting attractive yield without relying on higher leverage. This planned vehicle is set to build on Patria’s 26-year Latin America credit platform, which the firm said totals approximately $12.3 billion.
The new fund follows Patria’s first dedicated private credit fund and related vehicles, which closed in May 2025 with $314 million in commitments. As of December 31, 2025, Patria said the fund had deployed more than 70% of its capital across 14 transactions and was generating a gross unlevered IRR of 15.6%, with an average duration of 2.5 years. Patria said the portfolio has focused on senior secured, U.S. dollar-denominated loans with collateral, covenants, and cash-flow protections, targeting mid-market and family-owned borrowers.
Patria also cited comparative public-market data to argue that Latin American corporate fundamentals can be resilient relative to U.S. high-yield, even as spreads remain wider. The firm cited corporate leverage of roughly 2.8x net debt to EBITDA in the Latin American high-yield market, versus 5.5x in the U.S. high-yield market, and interest coverage of 5.4x versus 4.5x, respectively. It also noted long-term default rates in the region’s hard-currency public credit market are less than two-thirds of global high yield, while spreads have remained approximately 100–150 basis points wider than U.S. high yield credits. Patria added that sovereign rating ceilings, often referred to as the “zip code effect,” can contribute to wider spreads for issuers domiciled in high-yield sovereigns even when company-level fundamentals might support higher ratings elsewhere.
While the opportunity set has existed for years, Patria said the institutional private credit category in the region remains nascent. The firm estimated that private credit accounts for less than 1% of the roughly $2.3 trillion Latin American corporate credit system and argued that traditional channels have not meaningfully closed the financing gap. Patria said bank lending to corporates has been broadly flat for more than a decade, and that regional corporate bond markets have produced cumulative net negative financing of approximately $175 billion since 2017, as maturities and buybacks outpaced new issuance. Patria said that imbalance—tight supply of longer-tenor capital and steady demand for U.S. dollar-linked financing—can sustain a scarcity premium for well-structured bilateral private credit, particularly in the mid-market.
Patria said its credit platform integrates public credit research, private credit underwriting, and structured-credit analytics under a unified risk framework, supported by on-the-ground teams across six markets. The firm also highlighted its acquisition of a 51% stake in Brazil’s Solis Investimentos, which it said added approximately $3.5 billion in fee-earning AUM and expanded capabilities in asset-backed and structured credit, including securitization and ongoing monitoring.
The next vehicle is expected to continue Patria’s focus on senior secured corporate lending and asset-backed structures, with collateral packages, cash-flow protections, and covenant-heavy documentation designed to prioritize downside protection, governance, and predictable cash-flow generation.
KEY QUOTE:
“Latin America is a large, under-levered corporate credit market where reliable capital remains scarce. That scarcity, combined with a persistent regional risk premium, can keep spreads elevated even when fundamentals are resilient, supporting attractive yield without relying on higher leverage. Patria is built to convert this structural inefficiency into repeatable alpha through proprietary origination at scale, structuring-first underwriting, and a long-memory information edge under one risk framework.”
Javier Montero, Partner and Head of Private Credit, Patria Investments
