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Laxman Pai, Opalesque Asia: Already one of the fastest-growing alternative asset classes, with total assets under management (AUM) rising 168% from $315bn in 2010 to $845bn in 2019, the growth of private debt is expected to continue with a 73% increase in AUM to $1.46tn by 2025, said Preqin.
"Private debt will continue the expansion of the past decade over the next five years. Investors' ongoing search for yield has put private debt in their sights. With further growth expected in Europe and emerging markets, we predict the asset class will be the second-fastest-growing alternative, hitting $1.46tn in 2025," it said in a report.
"Private debt is sourced from long-term funds and investors that are willing to take on greater risk in anticipation of higher returns. Firms have stepped into a gap left by banks, which have been more heavily regulated since the Global Financial Crisis and are focused on lower-risk credits," said Ashish Chauhan, Senior Associate, Content at Preqin.
A third of all private fund managers surveyed by Preqin for Future of Alternatives 2025 believe banks will be less or significantly less important as debt lenders over the next five years, compared to a quarter that expects them to be more important.
The report revealed that a substantial majority (62%) of respondents expect private debt funds to play a bigger role over the next five years, with just 4% saying they will be less important. Nearly half (48%) of fund managers also expect capita...................... To view our full article Click here
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