10% of industries account for 60% of add-ons Download PitchBook’s Report here. An upcoming project unearthed an interesting trend around add-ons: Over 60% of them are done by 10% of the industry codes tracked by PitchBook. Sectors like insurance and healthcare clinics are severely fragmented, which gives PE investors an opportunity to put the buy-and-build model…
US sponsored middle market direct lending activity stayed robust in 3Q22 Last quarter, there was US$35.1bn of US sponsored middle market direct lending volume, 17% higher than 2Q22’s levels and the most since 4Q21’s record US$55bn level. The direct lending market remained quite busy in 3Q22, in contrast to the broadly syndicated market which slowed down…
Managers could face 16% increase in cash-flow challenged issuers next year Portfolio managers are potentially facing a 16% rise in the number of borrowers that cannot generate enough cash flow to meet interest expenses by the end of 2023, based on an analysis by KBRA DLD’s new parent, Kroll Bond Rating Agency (KBRA). The analysis…
European direct lending boom sees American dominance decrease A record-breaking number of direct lending funds have closed in Europe this year, a sign of the increasingly global reach of private debt. North America remains the biggest private debt market but has seen its proportion of funds closed globally drop to 53%, down from a high…
Investors gravitate to Asia-Pacific In the face of the global headwinds, this is one part of the world that appears to be looking relatively attractive. Since beginning to gather momentum in the aftermath of the global financial crisis, fundraising for Asia-Pacific private debt reached a record high last year of $11 billion. Although this is…
U.S. Primary yields soared in 3Q22 In 3Q22, first-lien institutional yields skyrocketed to levels not seen since the credit crisis. The average primary yield, assuming a 3-year term to repayment on first-lien institutional term loan Bs was 9.45% in 3Q22, up over 300bp from 2Q22 levels. While spreads widened, they only accounted for 19bp of…
Familiarity a plus Download PitchBook’s Report here. PitchBook’s Q3 2022 US PE Breakdown, available for free, crystallizes a trend we’ve been hearing about in recent months. Even by historical standards, fundraising is lopsided in favor of existing GP managers. So far this year, almost half (48%) of fundraising dollars have gone to established firms—in this case,…
Direct lending funds in Europe enjoy post-pandemic boom The number of direct lending funds has hit a new record. Europe-based managers have launched 80 funds so far in 2022, almost double the full-year figure for 2021, when 42 funds were raised. Whilst fund managers have been successful across a range of direct lending strategies, the…
Caution and sense of opportunity among Europe’s LPs At our recent PDI Europe Summit, investors were considered hesitant to commit new capital but recognised good deals are there to be done. Fundraising has been something of a struggle for Europe’s GPs, as indicated by the chart above. However, there was a sense at a recent…
KBRA DLD records $39B for 3Q22 volume, tops BSL & HY combined Direct lending volume topped output for liquid credit in the third quarter for the first time since KBRA DLD started tracking this data in January 2021. New issuance for US sponsored direct lending finished at $39 billion, nudging ahead of the $38 billion…