Private Debt Fundraising in Q1 2017 by Fund Type

The private debt industry recorded a strong start to 2017, as 21 vehicles reached a final close attracting $21bn in investor capital, despite marking a downturn from the record $50bn raised in Q4 2016. However not all strategies were able to capitalise on healthy investor appetite and attract high levels of commitments.

Direct lending funds in particular drove fundraising, securing their highest quarterly total of all time...

Q1 2017 Private Debt Fundraising

After a sluggish start to 2016, private debt fundraising saw a huge acceleration in pace over the year, and secured a record $50bn of investor capital in the final quarter of the year. While the opening quarter of 2017 failed to match this activity, momentum has nonetheless continued into the year with fundraising expected to maintain or increase this pace in the coming months...

Placement Agents and Private Debt

Placement agents servicing the private debt industry have been expanding their services to keep up with the development of the asset class. In addition to their traditional role of connecting fund managers with suitable investors, placement agents increasingly offer ongoing investor relations assistance, and services to help fund managers comply with regulatory standards...

First-Time Fund Managers

The environment for first-time private debt managers has begun to stabilise in recent years as the industry continues to mature. Fundraising has been consistently robust, performance has been strong, and investors are increasingly open to the prospect of committing to managers without a proven track record.

First-time private debt managers secured a record total in 2013 ($9.6bn), and in the years 2013-14 firms have raised over $23bn as the market continues to develop....

Private Debt Fund Performance by Strategy

The private debt asset class has continued to satisfy institutional investors with 93% of those surveyed by Preqin at the end of 2016 stating that the performance of their private debt investments had either met or exceeded expectation. However, performance as measured by the median net IRR of funds varies notably across the three central private debt strategies: direct lending, mezzanine and distressed debt...

Investor Views on the Key Macroeconomic Factors Affecting the Private Debt Industry

Institutional investors currently hold the private debt industry in extremely high regard, with 93% of respondents surveyed by Preqin at the end of 2016 stating that their investments had either met or exceeded their expectations in 2016. However, investors will be keeping an eye on the macroeconomic factors that affected their portfolio in 2016 and are likely to make an impact in 2017...

Private Debt Management Fees Drop to Eight-Year Low

Fund terms within the alternative assets industry have been of particular focus over the last few years as investors have largely united to push managers for greater transparency and improved alignment of interest.

Within the private debt industry, this approach appears to be paying dividends with the average management fee reaching an eight-year low for 2016 vintage funds which charge a mean fee of 1.63%...

Credit Strategies Start 2017 with Positive Performance in January

Preqin research finds that credit strategies have maintained their positive performance from 2016, with a strong start to the year through January 2017, as investor and fund manager confidence in the strategy grows.

Credit strategies were the second best performing leading hedge fund strategy last year with annual returns of 8.50%, well outstripping the Preqin All-Strategies Hedge Fund benchmark (7.40%)...