Mega deals on upward trend in 2021 The number of mega private debt deals (transaction of $1bn+) had been steadily decreasing since the 48 mega deals that were completed in 2017, but H1 2021 has seen an uptick in activity. Last year, the average deal size stood at $85m and 2020 saw 31 deals with
Average fund size in private debt increasing in 2021 The average fund size in private debt has increased by almost $200m between 2020 and 2021 so far. In 2020, 244 funds raised aggregate capital of $160bn, resulting in an average fund size of $743m....
Short term returns from private debt turn negative Pandemic support from governments and financial banks helped public equity markets to recover faster and more significantly than expected at the beginning of 2020. This dampened demand for private capital, with returns from private debt facing serious downward pressure over the past year....
Europe plays catch up in global PD Although North America-focused funds still constitute 61% of total private debt AUM globally, other regions are gradually expanding their share. Particularly in Europe, which made up 30% of global private debt AUM by June 2020....
Growth of PD funds in market accelerates in Q1 The number of private debt funds in market has been rising consistently over the past five years, but the last quarter has seen a marked acceleration. There are 592 funds in market as of April 2021, a 36% increase compared to January 2020....
North America dominates Q1 2021 PD fundraising North America-focused private debt managers closed 19 funds, raising aggregate capital of $18.4bn in Q1 2021, more than the other three regions combined. In comparison, the next largest region, Europe, saw seven funds raise $5.6bn....
Distressed debt funds average largest targeted fund size Although distressed debt strategies account for only 10.1% of 592 private debt funds in market, they are targeting 19.3% of aggregate capital. Distressed debt funds have the biggest average target fund size, at $1.4bn. By contrast, venture debt funds are 7.1% of the number of funds, but
Record levels of dry powder pressure PD returns A rise in inflation and ongoing asset purchases from central banks will make it harder for private debt funds to deploy dry powder in the future, raising the prospects of increased competition and lower returns....
Mega deals feature in crowded private debt market One of the major trends of 2020 in private debt was an uptick in mega deals, which are classed as those that are part of $1bn+ transactions. Although the number and value of PD deals declined in both 2019 and 2020...
Direct Lending Targeted in Private Debt Fundraising Although Q1 2021 saw a drop in both the number of private debt funds closed and aggregate capital raised, the outlook for the sector remains positive. As of April 2021, aggregate capital targeted stands at $300bn, up 56% compared to the start of 2020....