Global Private Debt Report

It was an exceptionally strong year for private debt funds, especially because of floating-rate corporate loans. In the US, leveraged loans gained 13.3%, and in Europe, they were almost the same at +13.4%. This was the best the US index has performed since the global financial crisis. Overall, private debt funds globally had an estimated return of 8.2% through the third quarter of 2023, which was the second-highest return among all asset classes in private markets.

Private debt fundraising in the traditional institutional channel slowed down in the second half of the year. This was due to increased interest in more liquid alternatives offering similar returns. Around $76.7 billion was raised in private debt funds in H2, down from $112.6 billion in H1 2023. However, the total fundraising for 2023 is expected to surpass $200 billion for the fourth consecutive year. Private debt has now become the second-largest private market strategy in terms of annual fundraising, surpassing venture capital.

As the traditional fundraising slowed, private credit strategies saw a shift towards non-traditional sources, like loans, high yield bonds, and treasuries. These alternatives experienced returns ranging from -10% to 30% throughout the year. While loans trailed behind stocks, they continued to outperform bonds. Additionally, retail funds and separately managed accounts for insurers gained momentum in the second half of the year. Despite being outside our tracked universe, the seven largest publicly traded managers accounted for nearly half of all credit strategy fundraising, tapping into new investor markets effectively. Moreover, there was an unexpected surge in fundraising for BDCs that underwent IPOs.

Direct lending remained the top choice within private debt, making up 31.8% of total funds closed in 2023. Mezzanine and infrastructure debt saw significant increases proportionally. The product range within private debt is expanding, moving beyond its traditional focus on direct lending and distressed investments. Investment grade opportunities are emerging as a new area of interest. Asset-backed finance is becoming a focus for private credit managers, gaining ground from banks.

While interest rates are higher today, investor appetite for private debt remains because in addition to the income generation, these funds provide diversification benefits, high risk-adjusted returns, and a hedge against inflation, among other benefits.’’

Jamal Hagler | Vice President of Research American Invest

It was a remarkable year for floating-rate leveraged loans, which make up most of the holdings in private debt funds. The US Morningstar LSTA Index, a good indicator of loan performance, increased by 13.3% in 2023, marking the highest annual gain since the global financial crisis and the second-highest return ever. Similarly, the European equivalent index also saw a significant 13.5% gain, reaching a post-GFC high. The interest component of the LSTA Index's gain was 73.2%, or 9.7%, roughly matching the blended yield to maturity on newly issued LBO loans in the broadly syndicated market. This yield rose from 6.7% in 2022 to 10.4% in 2023, ending the year at a quarterly high of 11.6%.

The consistently high yields are why private debt funds remain attractive and perform well compared to other strategies. Many are offering loans with yields equal to or higher than those in the bank-led syndicated market, which has slowed down except for refinancing and repricing. As a result, private debt is climbing up the performance ladder compared to other private capital strategies and currently ranks second highest, with a one-year return of 6.9% through Q2 2023. Our initial estimate for Q3 2023 suggests a trailing return of 1.9% over three months and 8.2% over 12 months, with less than half of our usual funds reporting so far.

At Marks Sattin Executive Search, we work with a wide range of investor-led and privately-owned businesses across all sectors and locations. With over 30 years of experience, we have helped more than several professionals find their next exciting opportunity.

Apply for an available CFO or Executive Finance job with us today or register your details and we will contact you at the earliest convenience.

posts

What's the latest on recruiting senior finance and accounting professionals?

Teaser

Finance & Accounting

Content Type

General

25/04/24

Summary

Over the years, we have developed a strong reputation as a leading Senior Finance and Executive Search firm. We’re proud to have well-established teams of finance and accounting recruitment cons

Teaser

Our employment update for senior accounting and finance professionals.

Read full article

Neil Burton

How technology is impacting the future of risk and compliance jobs

Teaser

Governance

Content Type

Fintech

18/04/24

Summary

The role of risk and compliance in financial services As a sizeable, growing portion of the financial services sector, risk and compliance play a vital role in ensuring that firms conduct busine

Teaser

With no signs of slowing down, strong risk and compliance is now more important than ever.

Read full article

David Clamp

What does the future hold for private equity?

Teaser

Executive Search

Content Type

General

18/04/24

Summary

Private equity (PE) is a growing industry that has always attracted ambitious top talent due to its high risk/high gain capital investment. Pre-covid, we saw the global private equity industry b

Teaser

Learn about emerging private equity job opportunities and more.

Read full article

Tracey Alper

jobs

Related jobs

Interim Project Accountant

Salary:

£300 - £330 per day

Location:

Wakefield, West Yorkshire

Industry

Business Services

Qualification

Fully qualified

Market

Professional Services

Salary

£250 - £350

Job Discipline

Qualified Finance

Contract Type:

Contract

Description

I have an urgent requirement for an Interim Project Accountant to join my client based in Wakefield.

Reference

NH - 180113

Expiry Date

01/01/01

Author

Niamh Hellewell

Author

Niamh Hellewell

Find out more

Head of Compliance

Salary:

Bonus + Benefits

Location:

City of London, London

Industry

Investment Banking & Capital Markets

Qualification

None specified

Market

Financial Services

Salary

£100,000 - £125,000

Job Discipline

Compliance

Contract Type:

Permanent

Description

A client of mine, a fast growing bank is looking for a Mandarin-speaking Head of Compliance to lead the function.

Reference

BBBH180219

Expiry Date

01/01/01

Author

Muddasar Mahmood

Author

Muddasar Mahmood

Find out more

Finance Assistant

Salary:

£120 - £125 per day

Location:

City of London, London

Industry

Consumer & Retail

Qualification

Part qualified

Market

Commerce & Industry

Salary

£100 - £150

Job Discipline

Part Qualified & Transactional Finance

Contract Type:

Contract

Description

Finance Assistant/PE backed events business/Temporary to permanent/Netsuite

Reference

ARH020524

Expiry Date

01/01/01

Author

Aaron Howard

Author

Aaron Howard

Find out more

CFO PE-Backed Environmental Services Business

Salary:

£150,000 - £175,000 per annum + Equity, Bonus and Benefits

Location:

West Midlands

Industry

Business Services

Qualification

Fully qualified

Market

Executive Search

Salary

£175,000 - £250,000

Job Discipline

Private Equity Executive Search

Contract Type:

Permanent

Description

Marks Sattin executive search is working with a PE-Backed Environmental services business

Reference

TA 3260

Expiry Date

01/01/01

Author

Executive Search

Author

Executive Search

Find out more

CFO PE-Backed Infrastructure Business

Salary:

£150,000 - £175,000 per annum + Equity, Bonus and Benefits

Location:

Yorkshire and the Humber

Industry

Business Services

Qualification

Fully qualified

Market

Executive Search

Salary

£175,000 - £250,000

Job Discipline

Private Equity Executive Search

Contract Type:

Permanent

Description

Marks Sattin Executive Search has an exciting opportunity for a CFO to join a PE Backed infrastructure business

Reference

TA 3259

Expiry Date

01/01/01

Author

Executive Search

Author

Executive Search

Find out more

CFO PE Backed wholesale Distribution business

Salary:

£180,000 - £200,000 per annum + Equity, Bonus and Benefits

Location:

West Midlands

Industry

Consumer & Retail

Qualification

Fully qualified

Market

Executive Search

Salary

£175,000 - £250,000

Job Discipline

Private Equity Executive Search

Contract Type:

Permanent

Description

Marks Sattin Executive Search is working with an Established multisite wholesale Distribution business

Reference

TA 3258

Expiry Date

01/01/01

Author

Executive Search

Author

Executive Search

Find out more

CFO PE-Backed Product-Led Distribution Business

Salary:

£150,000 - £170,000 per annum + Equity, bonus and benefits

Location:

Essex

Industry

Business Services

Qualification

Fully qualified

Market

Executive Search

Salary

£125,000 - £175,000

Job Discipline

Private Equity Executive Search

Contract Type:

Permanent

Description

Marks Sattin Executive Search is working with a PE-backed multisite product-led distribution business

Reference

TA 3257

Expiry Date

01/01/01

Author

Executive Search

Author

Executive Search

Find out more

Tactical Buyer

Salary:

£28,000 - £32,000 per annum

Location:

Gloucester, Gloucestershire

Industry

Consumer & Retail

Qualification

None specified

Market

Commerce & Industry

Salary

£30,000 - £35,000

Job Discipline

Part Qualified & Transactional Finance

Contract Type:

Contract

Description

Marks Sattin have been engaged by a global leader in engineering and manufacturing to recruit two Buyers on interim 6-9 month contracts.

Reference

BBBH180160

Expiry Date

01/01/01

Author

Ben Neeamuthkhan

Author

Ben Neeamuthkhan

Find out more

Finance Director PE-Backed Tech-enabled Business

Salary:

£110,000 - £120,000 per annum + Equity, Bonus and Benefits

Location:

London

Industry

Technology

Qualification

Fully qualified

Market

Executive Search

Salary

£100,000 - £125,000

Job Discipline

Private Equity Executive Search

Contract Type:

Permanent

Description

Mark Sattin Executive Search is working with a PE-Backed Tech enabled Business.

Reference

TA3257

Expiry Date

01/01/01

Author

Executive Search

Author

Executive Search

Find out more

Purchasing Officer

Salary:

£30,000 - £35,000 per annum

Location:

Stockport, Greater Manchester

Industry

Business Services

Qualification

None specified

Market

Financial Services

Salary

£35,000 - £40,000

Job Discipline

Process Improvement

Contract Type:

Permanent

Description

Purchasing Officer Stockport £30,000 - £35,000

Reference

BBBH180207

Expiry Date

01/01/01

Author

Terri Bishop

Author

Terri Bishop

Find out more

View all jobs