In private debt, size matters
One of the findings of our recent Decade issue was the rapid advance in the sizes of private debt funds. Increasing concentration of fundraising among the top managers and decreasing vehicle launches means the average fund size has shot up in recent years.

While the average fund size was typically around $500 million between 2012 and 2020 (with a notable exception in 2017 when it surpassed $600 million), 2021 and 2022 have seen the average size advance rapidly to $856 million and $964 million, respectively.

The Decade issue also noted that North America has long been the most developed market for private credit and was a significant player before the global financial crisis.

Even today, much more capital is raised for North American vehicles than European. The US has been able to reassert itself since the covid crisis, while Europe has struggled during a period of sluggish economic growth marked by an energy crisis and the war in Ukraine.

The data also reveals that private credit has yet to materially take off beyond Western markets. Activity is fairly low in the Asia-Pacific region, and virtually unheard of in the developing world. Over the next decade, it will be interesting to see whether that changes and private debt lays claim to being a truly global asset class.

Keeping ESG in the family
ESG is set to become a larger focus for family office investors. According to research by fund services firm Ocorian and reported by our PEI colleagues, 93 percent of family office professionals surveyed said ESG principles are a key consideration in investment priorities.

Looking ahead, 88 percent of respondents expect an increasing focus on ESG principles from a fiduciary perspective over the next three years, while 37 percent expect a dramatic increase.

The survey garnered responses from 130 family office professionals responsible for around $62.4 billion of assets under management.

“We’re seeing many family offices, particularly those with a heavy influence from younger generations, bringing in new ideas and values which increasingly align with sustainable investing principles,” Amy Collins, head of family office at Ocorian, said in a statement.

These findings may well vary depending on geography. Among the Asia-based family offices PEI has spoken to in recent months, ESG considerations have generally sat relatively low on their list of priorities; part of which is to do with the comparative nascency of ESG, sustainability and impact in that part of the world more broadly.

Indeed, a November report from Raffles Family Office and Campden Wealth found that only 42 percent of APAC families engage in sustainable investing.

Next stops: Japan and Korea
A heads up that our Private Debt Investor events calendar, which has already encompassed Singapore and London this year, takes us to Seoul and Tokyo between 26-29 June for Japan Korea Week.

The fifth iteration of our annual visit to two of Asia’s most important investor hubs has already attracted more than 300 Japanese and Korean institutions and global private debt leaders.

Among the keynote speakers at the event are Tadasu Matsuo, managing director and head of global alternative investments at Japan Science and Technology Agency; Andrew Lockhart, managing partner at Metrics Credit Partners; and Todd Leland, president of Goldman Sachs International.

If you haven’t already, make sure to book your place now!

Essentials