Almost half (42%) of private equity investors have exposure to private debt and this proportion is set to increase as more investors consider committing to private debt in the future, according to research by Preqin.
Approximately 18% of the private equity investors that Preqin recently spoke to, that do not currently invest in private debt, will
consider gaining exposure to private debt in the near future, demonstrating the growing appetite for these funds.
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The retrenchment of banks from the leveraged loan space and limited activity in the European CLO market has resulted in many companies turning to alternative sources for private debt. Both institutional investors and alternatives managers have identified this as an opportunity.
Other Key Facts:
– 83% of private equity investors interviewed currently investing in private debt gain that exposure through their
private equity allocation. About 9% of private equity investors currently investing in private debt have a separate
allocation to private debt in their investment portfolio.
– 47% of private equity investors currently investing in private debt gain exposure through mezzanine funds.
– A further 26% of these investors invest in private debt through distressed debt funds.
– Recently closed private equity senior debt funds include BlueBay Asset Management Private Debt Fund, managed by BlueBay Asset Management, which closed on EUR800 million in May 2013, and Maranon Senior Credit Fund II, managed by Maranon Capital, which closed on US$200 million in April 2013.
– A number of private equity senior debt funds have launched in 2013 so far, including 1903 Debt Fund II, managed by GB Merchant Partners and targeting US$400 million and Vista Equity Debt Fund I, managed by Vista Equity Partners and targeting US$600 million; both of these vehicles are targeting investment opportunities in the US.
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