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...

Private Debt: 2016 Fundraising Update

In 2016, the private debt industry saw a cool-off in fundraising following the banner year in 2015 when almost $100bn was raised. The year was also characterised by a concentration of capital among the larger, more experienced managers while the fundraising marketplace grew increasingly congested as investor appetite for private debt increases.

Overall, 119 funds closed globally raising a combined $74bn, with Preqin expecting these figures to rise by up to a further 10% as more information becomes available...

Infrastructure Debt Rises in Prominence

Although banks are the primary providers of financing for global infrastructure projects, liquidity and capital requirements can prevent them from fully serving the market. This has led to an opportunity for the unlisted fund management industry to become a significant niche player in the provision of debt financing for infrastructure...

UK-Based Private Debt Fundraising

It is perhaps unsurprising that the UK has become the predominant market for the European private debt industry ever since regulation fuelled the growth of the market in the aftermath of the Global Financial Crisis. The UK accounts for a higher proportion of fund managers than any other European country, with 133 of the continent’s 334 fund managers located in the UK, while 186 active investors are also headquartered in the country holding a combined $3.9tn in assets under management...

The Lead Left: Asia-Focused Funds in Market

Preqin’s Private Debt Online database currently tracks 24 private debt funds in market with a primary geographic focus on Asia. Collectively, they are targeting $5.9bn of investor capital with an average target size of $283mn.

Of the five largest funds in market, three are opting to make direct lending investments and the remaining two are choosing to target special situations and distressed debt opportunities. It is interesting to note that although there are only four distressed debt funds in market...

Credit Strategies Asset Flows

Credit strategy hedge funds have recorded strong recent performance in 2016 YTD, making gains of 7.03% as of the end of October. Despite this, the strategy has struggled to attract investor capital, and suffered net outflows through the first two quarters of the year. This has led to a diminution of the strategy’s total assets under management (AUM) from the end of 2015, but net inflows in Q3 suggest that recent returns have been bolstering investor confidence
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First-Time Private Debt Fundraising

First-time private debt funds are of increasing interest to investors: a recent Preqin study found that the majority of investors across the private capital landscape will now consider investing in emerging funds. However, it appears that this segment of the market has yet to fully develop, and continues to be bound to the fundraising picture at the top end of the industry.

Over the past decade, first-time fundraising has often run counter to the overall private debt fundraising environment. For instance, in the period 2010-2012, when overall fundraising saw annual increases...

Europe- and North America-Focused Real Estate Debt Funds

Real estate debt has seen considerable growth within European markets over the past few years and fundraising grew significantly from €0.5bn in 2012 to €4.3bn in 2015, while a further €3.7bn has already been secured in 2016 YTD. Nonetheless, North America-focused fundraising still dwarfs that of Europe, with funds already raising a record €12.3bn in 2016...

Private Debt Dry Powder by Fund Type

The past few years have seen a large amount of investor capital in private debt funds remain unspent by fund managers, with strong fundraising activity resulting in a significant ‘wall of capital’. In 2016 so far, private debt dry powder has climbed to $199bn, up from $191bn at the start of the year, although levels of uncommitted capital have fluctuated across different fund types.

Dry powder held by distressed debt managers has risen by nearly a third (31%) since the end of 2014 and now stands at $63bn, the highest of any fund type...

Europe-Focused Private Debt Fundraising

The Europe-focused private debt industry has enjoyed substantial fundraising success in recent years and many countries within the region have seen heightened alternative lending activity in the last decade. However, a notable decline in direct lending in 2016 YTD has contributed to a wider slowdown in fundraising activity focused on Europe throughout the year...