While all areas of private credit are somewhat influenced by wider macroeconomic cycles, distressed debt tends to be an area that sees more significant swings in fundraising activity. As both GPs and LPs tend to gear up in anticipation of periods of market dislocation, we typically see fundraising for distressed and special situations funds start to rise – before tailing off quite sharply once a dislocation event has occurred and as the opportunity set begins to dwindle.
Data: Distressed fundraising driven by economic cycles
Fundraising for distressed debt strategies continues to follow broader trends, after a poor 2023 for fundraising across the private credit space.
