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Laxman Pai, Opalesque Asia: The youngest asset class in the private capital universe, private debt has soared to incredible heights since the Global Financial Crisis (GFC).
Assets under management (AUM) have grown consistently each year and, as of June 2019, reached a record $812bn, according to Preqin.
Private debt is now the third-largest asset class in private capital, ahead of infrastructure and natural resources, pointed out the 2020 Preqin Global Private Debt Report.
The market has continuously expanded ever since the GFC when banks retrenched from serving the middle market as they derisked their balance sheets.
Private debt firms swooped in to capitalize on the void in the middle market. Over 4,100 investors now make allocations to the asset class.
Demand has given rise to a record 1,764 fund managers now active in the space - up from 1,604 at the beginning of 2019 and over twice as many as five years ago - and a significant pool of capital available for them to put to use.
And put it to use they have. In tandem with the growth in AUM, dry powder had been rising for the past five years; but in 2019, dry powder levels flattened somewhat, rising by only $4bn, from $292bn at the end of 2018 to $296bn as of December 2019, despite an 8% increase in overall AUM.
A total of 151 private debt funds closed to raise a combined $104bn, down from $110bn in 2018 through 210 fund closures, which in turn was down from the record $132bn secured through ...................... To view our full article Click here
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