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Laxman Pai, Opalesque Asia: The number of private debt funds in the market has more than doubled since January 2017, whilst private debt funds sit on $364bn of dry powder, said a study.
According to the Q2 2021 Private Debt Quarterly Report published by Preqin, as of July 2021, private debt managers are targeting $295bn across 651 funds. This is more than double since January 2017 where $130bn was targeted across 303 funds.
The report revealed that this increase has been driven by the continued fundraising of direct lending funds, which represent a majority of both the number of funds in the market and capital targeted at 53% and 56% respectively.
Meanwhile, $43bn of capital was raised in Q2 2021 compared to $36bn in Q1 2021.
Europe-focused private debt funds raised $22bn in Q2, four times more than in Q1 2021, and more than any other region, including North America ($19.5bn).
Preqin report also suggests that 68% of investors target direct lending funds as of Q2 2021 compared to 38% in Q2 2020.
It report revealed that 79% of investors will be allocating to only one private debt fund in the next 12 months, up from 67% in Q2 2020.
Sam Monfared, AVP Research Insights at Preqin, said: "The private debt asset class is increasingly competitive and private debt funds keep bringing attractive yields to portfolios. Any severe distress from the pandemic seems, at this point, to be in the rear-view mirror with the help of central banks."
Sam added: "C...................... To view our full article Click here
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