Private debt: Preparing for the unknown

Private debt goes from periphery to prominence

Approximately US$100 billion was raised by private debt funds in 2015 and again in 2016, matching the high watermark previously seen in 2008. Interest continued apace in 2017, as investors put almost US$120 billion into private debt funds. Assets under management skyrocketed from US$245 billion in 2008 to almost US$667 billion a decade later. They are projected to double again by 2023.

How long will this continue? Fundraising has slowed down through the first three quarters of 2018, but has not dropped precipitously. More interesting than the magnitude of current growth, however, is its composition. Investors are seeking the safety of established managers with demonstrable track records with whom they may already have relationships and in some cases seeking to amplify these relationships by establishing “strategic relationships” or SMAs. 

Read about opportunities in private debt and how to prepare for the challenges (PDF)