Chart of the Week: Purpose Driven
Middle market borrowers look to banks for refinancings; for buyouts and add-ons, almost twice as many seek institutional lenders.
Middle market borrowers look to banks for refinancings; for buyouts and add-ons, almost twice as many seek institutional lenders.
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...
Size Doesn’t Matter in PE Fund Performance Over the Long Term
Despite the dueling claims that smaller PE fund managers lack sophistication or sufficient scale, or that larger fund managers lack the nimbleness and operational focus and expertise necessary to improve portfolio companies, returns across different sizes of funds are relatively uniform in the long term. 10-year horizon IRRs (which use changes in NAV in addition to industry-wide net contributions over time as the cash flow inputs in an IRR calculation) for PE funds of any size bucket are between 10% and 11%...
Contact: Timothy Stubbs timothy.stubbs@spglobal.com
We noted last month that realised volatility in the European investment grade CDS market, as measured by the Markit VolX index, was at its lowest for two years. By the end of October, volatility had dipped to 18%, which was the lowest level since the heady days of June 2007. A number of future events were mooted that had the potential to trigger market uncertainty, including next month’s Italian referendum.
But a victory for Donald Trump in the US presidential election was viewed by most as a highly unlikely occurrence. Spreads rallied in the run up to the vote, with the Markit CDX.NA.IG tightening from...
European CLO Issuance
Issuance of European CLOs has reached a post-crisis high as jumbo investments in senior tranches have anchored issuance. European CLOs have seen year-to-date issuance of €14.7 billion across 36 deals, compared with the previous post-crisis high of €14.3 billion in 2014, when 34 deals were completed...
RP Builder Basket By Type & Rating, YTD
Source: SPP Capital Partners Contact: Stefan Shaffer stefan@sppcapital.com
Add-ons retain commanding share of US buyout activity
At 64% of all US buyout activity through the end of September, add-ons have never before constituted such a lofty proportion of private equity investing. Part of that is a statistical quirk—as the volume of buyouts has slid while investors by and large maintained the pace of adding on, their relative proportion was bound to increase. But as has been noted time and again over the past couple years as the add-on percentage of...