Private Debt industry reports strong second quarter
Private debt on the rise again: After a rather weak start to the year, the asset class is now looking back on an even stronger second quarter. As the data provider Preqin reports, a total of 34 billion US dollars was invested in 49 private debt funds closed between April and July. To compare: In the first quarter, 36 funds had collected “only” 22 billion US dollars in new money.
Preqin currently estimates the number of funds on the market at 486. Both this figure and the total volume of capital raised of 239 billion US dollars represent new records for the industry. In the second quarter, the majority of the newly raised money was put into “Special Situations” and “Distressed Debt”. While five funds aggregated a total of 12 billion US dollars in the first-mentioned segment, nine funds for non-performing loans recorded an investment volume of 9.7 billion US dollars.
As far as the further development of the asset class is concerned, Preqin forecasts a clear pattern of behavior on the part of investors: The majority of lenders will concentrate predominantly on just one fund in the coming twelve months. The pressure on the market will intensify accordingly: Funds will find it increasingly difficult to distinguish themselves from the masses – a situation that will be particularly hard on newcomers. At the same time, investors will be confronted with the challenge of finding and selecting the right fund. Preqin