Private Debt Intelligence – 1/23/2017

Mezzanine Vehicles Drive Private Debt Fundraising in 2016

2016 saw 141 private debt vehicles reach a final close raising a combined $89bn, a slight slowdown from the 156 funds that secured a record $97bn of investor capital in 2015. However, 2016 still marked another year of extremely robust fundraising with investor appetite for the asset class showing no signs of diminishing.

Direct lending funds accounted for the highest number of vehicles closed through the year with 51 vehicles raising a combined $24bn…

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Trading Places

Spreads for facility sizes of $100 million or less approached 500 bps over Libor at year-end; larger deals contracted to around 450 bps.

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Markit Recap – 1/16/2017

Speeches by UK prime ministers were rarely market moving events, despite what some of the more breathless commentators in the broadcast media would have you think. But perhaps this has changed since the Brexit referendum in June last year, even if the spin doctors manage the message in advance.

The main thrust of Theresa May’s speech this week was leaked in the days leading up to her address, so traders and investors were not exactly hanging on her every word. But there were still some pronouncements that did affect sentiment, particularly in the FX markets, such as the confirmation that the final deal will be put to parliament…

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Private Debt Intelligence – 1/16/2017

Private Debt Fundraising Success, 2012 – 2016

Although private debt fundraising in 2016 did not match the levels seen in previous years, Preqin research finds that a record proportion of funds exceeded their target size. However, the year also saw funds take longer to reach a final close, on average, than in any previous year as smaller managers struggle to attract capital at the same rate as the most experienced firms.

In 2016, nearly a quarter (23%) of private debt vehicles exceeded their target size by more than 125%, while a further 38% of funds achieved 101-124% of their target…

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Growing Gap

Large liquid loans have been hit with repricings, causing the illiquidity premium for the middle market to approach 200 bps – well above the historic average.

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