US LBO first-lien leverage at all-time high Total leverage on US LBO deals continues to hover around the 7.1x mark in 1Q22, the same area its averaged over the last seven quarters. What is different this quarter is an increase in first-lien leverage which is averaging 5.9x so far, the highest level tracked all-time. So…
Private debt AUM growth will spur product innovation Preqin expects private debt to be the fastest growing alternative asset class over the next five years, with forecast compound annual growth rate of 17.4% from 2021 to 2026 outpacing infrastructure (16.7%), private equity (15.8%), and real estate (7.1%). This growth would be an acceleration from 15.27%…
Safety first is good news for senior debt Investors coming from fixed income, and with anxiety around inflation, see the senior end of the spectrum as their natural entry point into private debt. The covid-19 pandemic has seen senior debt fundraising take more market share, with PDI’s 2021 Fundraising Report recording that 45 percent of…
BDC loan valuations stabilize in most recent filing period The most recent data from BDC earnings season shows that debt valuations stabilized in 4Q21, as price appreciation finally eased off, following a huge rebound from the lows seen in 1Q20 when COVID first hit. Looking at the cohort of BDCs that have filed as of…
Public PEGs got much bigger last year Download PitchBook’s Report here. 2021 was bumper year for public PE firms. PitchBook’s latest Analysis of Public US PE Firm Earnings has several interesting breakdowns, but YoY AUM trends stand out. Blackstone, KKR, Apollo, Carlyle and Ares all increased their AUMs, some more than others. KKR led the way,…
Private debt sees continued consolidation among fund managers As private debt continues to grow, so does the size of its largest funds. In Q1 to Q3 of 2021, the top 10 managers in the asset class by AUM accounted for 42% of all capital targeted, while their smaller peers outside of the top 50 attracted…
Europe has maintained its deal discipline Despite some inflation effects being felt, the overall picture is rosy for those operating in the market. A new report from investment banking advisory firm Lincoln International highlights some of the trends from a strong year for deals in Europe in 2021. One area for concern in previous Lincoln…
BDCs post further NAV gains BDC earnings season is underway, with funds that have filed to date posting positive performance overall in 4Q21, topping off a strong year for the asset class. BDC earnings climbed in 2021 against a backdrop of robust portfolio company performance and record origination activity. BDC origination activity was bolstered…
Fewer emerging lenders in 2021 Download PitchBook’s Report here. 2021 marked a decade low for “emerging firm” private debt fundraising, according to PitchBook’s Annual Global Private Debt Report. Only 64 private debt funds were raised last year by emerging firms, down from 145 in 2020. Before 2021’s slowdown, emerging lenders raised at least 100 private debt…
Investors’ target allocations indicate bright fundraising future for private debt Nearly every type of investor increased their target allocations to private debt over the past year, in part due to low real returns from public debt investments. Most investor types, with the exception of family offices and wealth managers, have current allocations far below target….