Elham Credit Partners, the private credit arm of Hillhouse Investment, has partnered with a Daiwa Securities Group-backed digital investment bank to explore private credit opportunities in Asia Pacific, with an initial focus on Japan, according to a statement.

Under the partnership, Digital Climate Group will source private credit deals in Japan for Elham, initially targeting the country¡¯s emerging midmarket sector, the companies said in a statement Tuesday. The two firms also plan to explore cross-border opportunities in the Middle East and across Asia, according to the statement.

Elham joins global firms such as Apollo Global Management, Blackstone and KKR in seeking a foothold in Japan¡¯s lending market, betting that demand for private credit will surge. Yet cracking the world¡¯s third-largest economy remains a long game, with bank lenders offering stiff competition.

In September, Daiwa made an undisclosed investment in Digital Climate Group, planning to plug the financing gap for impact-driven projects across Asia and the Middle East, according to a joint statement at that time.

Elham was said to be raising some $700 million to $750 million for the first close of its inaugural private credit fund.