Private Debt Investor’s annual special report explores the mega-trends, market dynamics and up-and-coming talent shaping the future of private credit.
The future of private debt is made in the present, but a rapidly-changing macroeconomic environment is causing many lenders and LPs to take a closer look at their operations to ensure they stay ahead of their competition. In this special report, we examine how the market is set to change across key themes, such as fundraising, dealmaking and structuring, and why artificial intelligence and the increasing democratisation of the industry could change the face of the asset class.
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RISING STARS: LPs
LPs’ view: ‘I expect ABL and credit secondaries to expand rapidly’
LPs featured in our Rising Stars 2024 list expect private credit’s fundamentals to maintain their significance over the coming months – though growth is expected in several key areas.
RISING STARS: GPs
GPs’ view: ‘There will always be a place for direct lending’
GPs from PDI’s Rising Stars 2024 list discuss the increasingly blurred lines between private and public credit markets and why asset-backed strategies might rival, rather than replace, direct lending.
RISING STARS: LAWYERS
Lawyers’ view: ‘Hybrid and semi-liquid credit strategies attract investor interest’
Lawyers from the PDI Rising Stars Class of 2024 share their thoughts on the key challenges facing GPs and LPs in a rapidly changing market.
ANALYSIS
PREVIOUS COVERAGE
Private debt’s Rising Stars: Meet the class of 2024
The 2024 Rising Stars list of 40 individuals under the age of 40 whom we believe have the potential to shape the future of the asset class.
Rising Stars 2024: A-C
Portfolio builders, dealmakers and advisers to young people feature in the first cohort of the Rising Stars 2024.
Rising Stars 2024: C-G
Forward thinkers, fierce negotiators and key drivers in Africa are part of the second cohort of the Rising Stars 2024.
Rising Stars 2024: H – R
Company founders and mentors star in the third cohort of the Rising Stars 2024.
Rising Stars 2024: S – Z
'Top-notch' skills, a children's author and a 'pessimist' feature in the final cohort of the Rising Stars 2024.
What lies ahead for private debt?
Talent management, bank funding and the rise of artificial intelligence are just some of the issues that private debt players need to contemplate.
Senior debt: All eyes on M&A recovery in 2025
The first half of 2024 has seen bumper fundraising for private debt’s number one strategy, with attention being drawn to a possible M&A revival.
Golub Capital on cycle-proof values
Private credit managers should focus on the timeless values that will serve them well despite broader market uncertainty, according to David Golub, president of Golub Capital.
The talent crunch calls for creative thinking
Firms are increasingly looking for private debt professionals who can offer them ‘the whole package’, but a dearth of specialist talent is highlighting the challenges of hiring.
Partners Group on how liquidity is driving innovation in private credit
Increasing flexibility surrounding liquidity options is leading to a host of new opportunities for private credit investors, say Partners Group’s Andrew Bellis and Lori Pomerantz.
Are banks and private debt funds getting too close for comfort?
Bank lending to funds is a growing source of concern for regulators.
NAV loans are a tool for growth, says 17Capital
The overwhelming majority of NAV loans are being used to fund M&A and create additional value in portfolios, says 17Capital’s co-founder and managing partner, Pierre-Antoine de Selancy.
Where does ESG fit in the future of private debt?
The rhetoric surrounding ESG may be well established in the private debt industry, but some firms’ attention to social and sustainability concerns is starting to wane.
All Seas Capital: Borrowers and LPs line up for hybrid opportunities
Market players are increasingly recognising the advantages of pursuing hybrid credit strategies, say All Seas Capital co-founders Marc Ciancimino and Cristobal Cuart.
Private debt still slow to embrace AI
Fund managers are starting to employ AI but are barely beginning to consider vast untapped opportunities.
PAG: SRTs step into the spotlight
Significant risk transfer is one of the most talked-about investment ideas in private debt. But greater investor education is necessary to maximise the benefits of such deals, says PAG partner James Parsons.
CLOs gain momentum
Collateralised loan obligations are growing in popularity across the equity and credit markets, but some areas are gaining more traction than others.
The direct-lending approach by InterVest capital partners
Direct lending is gaining traction with investors seeking more private deals with creative structures, say InterVest capital partners’ Michael Gontar and Steven Tenenbayev.
Searching for talent: Building up your bench
As the private credit market goes from strength to strength, novel recruitment strategies are needed to find – and retain – equally strong talent, says Gail McManus, founder director of PER.
Pemberton Asset Management on multi-strategy solutions and new frontiers in private credit
Thomas Duetoft, partner, senior portfolio manager and multi-strategy solutions lead at Pemberton Asset Management, highlights the factors driving more diverse investment opportunities for LPs.
FC Capital on Australian private debt
Australia’s private credit market is maturing, but a better understanding of the region’s nuances would serve investors well, says FC Capital’s CEO Christan Brehm.
Private credit’s growth opportunities take shape, says abrdn Investments
An evolving investor base is creating an environment in which private credit can flourish, says abrdn Investments' head of private credit Neil Odom-Haslett.
Aztec Group on how tech can reduce complexity
Tech solutions are becoming increasingly sophisticated and can deliver the real-time reporting that private credit managers need to innovate throughout a fund’s lifecycle, says Kevin Hogan, group head of private credit at Aztec Group.
Schroders Capital on infra capturing the mainstream
Jerome Neyroud, head of infrastructure debt investments at Schroders Capital, on why infra debt is no longer niche, the appeal of the asset class and the sectors poised to drive future demand.
Barings on direct landing in the APAC region
Shane Forster and Justin Hooley, Asia-Pacific portfolio managers at Barings, explain why this segment of the direct lending market offers a compelling growth story.
Whether it’s evergreen structures, the use of AI or the inroads being made in attracting retail clients via tokenisation, this year’s Future of Private Debt issue reveals significant progress on some age-old themes. Our cover story charts the progress on five innovations we think will revolutionise the asset class. We also look at how to future-proof assets in times of uncertainty and reveal the results of our Fund Leaders Survey 2023, which suggest that private debt remains a favoured asset class for investors.
Our Future of Private Debt report looks at the trends shaping the asset class and features our 2022 list of 40 Rising Stars who have the talent to take the debt industry to new heights over the next decade. Twelve of the list are women, up from six in our previous Rising Stars ranking in 2020 – welcome at a time when LPs are starting to flex their muscles over the lack of diversity in deal teams.
Private debt has emerged over the past decade as one of the most dynamic private markets, largely because of its ability to come up with fresh solutions to emerging issues and investor demands. In this special report, we pick out 20 of the biggest themes emerging in private credit. They encompass areas as diverse as investor demands for a more sustainable approach through to the dizzying pace of technological change. The future really does start here.
We spotlight the emerging talent in the private debt industry with our Rising Stars 2020 list of 40 individuals under the age of 40 that are set to take the debt industry to new heights over the coming decade. Selected from nearly 150 peer nominations and recommendations from senior industry figures, they comprise GPs, LPs, bankers, service providers and lawyers.
Private debt is becoming more diverse. There are more women in the industry – and in more senior positions – and there is more activity away from the traditional North American hotbed. While the US and Canada continue to lead the way, Europe and Asia-Pacific are catching up. Next is to move from a mindset of getting more women into boardrooms to one of fostering greater cognitive diversity and variety of backgrounds.
Rapid technological advancement and global uncertainty – political and economic – are pressing issues for the future of private debt. Predicting outcomes for the industry has never been more challenging, nor more vital.
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