More winners than ever

Our 2017 awards indicate an asset class brimming with confidence and continuing to diversify.

Watching various remarkable exploits at the Winter Olympics served as a reminder that records are there to be broken. Our own 2017 annual awards prove the point: a record number of categories and record number of votes as we invited poll participants to look back on a year that produced a record amount of private debt fundraising.

It was a year of the “big beasts” as the average fund size rose to more than $1 billion – a remarkable leap from the average of just less than $700 million in 2016. In Europe, notably, fundraising doubled to almost $45 billion compared with the previous year.

With the awards into their fifth year, some firms’ trophy cabinets are now almost full to bursting. SSG Capital Management and Intermediate Capital Group lead the way, with 11 category triumphs each at an impressive rate of more than two per year. They may reasonably now be considered part of an award-gathering elite that includes the likes of Golub Capital, Oaktree Capital and Blackstone.

However, while there’s no denying the fact a greater amount of capital is now being raised by a smaller number of funds, the evolution of the asset class is not solely about increasing size and the dominance of a thriving few – it’s also a tale of growing diversity. This enabled us to add five new categories in 2017 for European SME lender, European speciality finance, Americas sell-side analyst and European and Americas fundraisings.

Given the buoyant conditions that have been in place for some time now, it’s inevitable that questions will be asked about how much longer the good times can roll.

The amount of capital raised by distressed debt funds reached a new peak last year, and one would assume there’s a reason for this. Some suggest, arguably a little cynically, that distressed strategies are simply very pitchable at the moment. Following the recent stock market volatility, the theory runs that it’s easy to persuade nervous investors to hedge against a further extension of the benign cycle.

But despite some signs of stress in the UK retail sector (see our video HERE for thoughts on this), there is little if any concrete evidence yet of a substantial change in circumstances. The economic backdrop remains broadly positive and offers hope that the steadily accumulating mountain of capital ‘dry powder’ will eventually find a home (see HERE for ruminations on this topic).

As things stand, there is little reason to think records cannot once again be broken in 12 months’ time.

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