Fundraising unlikely to reach last year’s peak – exclusive

Closed-ended private debt fundraising reached a respectable $67bn by the end of Q3, but last year’s $106bn total will be hard to reach.

Fundraising by 101 closed-ended private debt funds in the first three quarters of this year stood at $67.4 billion according to the latest data from PDI Research & Analytics.

This compares with $106.3 billion raised by 159 funds during the whole of last year, a figure that this year’s total will struggle to match. In context, last year was one of the strongest private debt fundraising years on record.

If the rate of fundraising seen so far this year remains consistent in the fourth quarter, then this year’s total is likely to be somewhere close to the $93.2 billion collected in 2014.

If so, this would continue the strong private debt fundraising trend seen in recent years. After $107.7 billion was raised in 2008, annual fundraising fell to an average level of $55.5 billion between 2009 and 2012. This average climbed to $106.7 billion between 2013 and 2015.

In all, since 2008, 1,050 closed-ended private debt funds have raised almost $717.2 billion.

The largest fund closed so far this year was Blackstone’s Tactical Opportunities Fund II, a fund of private debt funds, which closed on almost $6.7 billion in January. The largest in Q3 was also a Blackstone fund: the Real Estate Debt Strategies III vehicle, which closed on $4.5 billion in August.

Nine of the ten largest closings in the year so far have come from US-based managers – including the likes of Lone Star, KKR and Bain Capital – with only UK-based Park Square Capital challenging the monopoly thanks to the $1.3 billion close of its Capital Partners III fund.