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Laxman Pai, Opalesque Asia:

The combined assets under management (AUM) of European alternatives stood at €2.95tn ($3.16tn) as of September 2022, said a study.

Of this, the UK and Western Europe both surpassed €1tn of private capital AUM in 2022, though the UK's share has fallen in recent years to reach a new low of 44% of the total at €1.04, according to the Alternatives in Europe 2023 report by Preqin.

The Preqin report also predicts the compound annual growth rate (CAGR) for Europe-focused AUM in private capital to fall to 10.9% between 2021 and 2027. In contrast, the growth rate was 17.3% between 2018 and 2021.

However, this rate is higher than that observed between 2010 and 2015, suggesting private capital remains on a higher growth path than in the years following the global financial crisis.

Preqin said that private debt is the only asset class on the right side of tighter credit markets given many funds exposure to higher rates through variable lending facilities, according to the Preqin report.

The asset class is therefore providing an effective anchor for risk-based portfolio allocation strategies, delivering an 8.5% return against a standard deviation of 6.25%, for vintages between 2011 - 2020.

Fundraising to early June 2023 by private debt Europe-based fund managers was tracking at €9.6bn. This is almost entirely driven by UK-based funds, which despite accounting for only 53% of the 15 funds closed so far this year, secur......................

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