PDI 50: The top 10

We examine activity at each of the top 10 firms in this year's ranking of private debt's biggest fundraisers.

1. Ares Management

$54.2bn

With a multibillion-dollar fund raised this year, Ares secured its place at the top of the PDI 50 for the second year in a row. In October, after the PDI 50’s June cut-off period, Ares confirmed it had commitments of $7.9 billion for Ares Capital Europe V. However, with a $9 billion target the firm’s fundraising total is likely to continue rising through the next year. The predecessor vehicle had a $4.5 billion target and held a final close at $6.5 billion in July 2018. Ares has been one of the most active fundraisers globally in recent years, boosting it from a fourth-place spot in 2018.

2. AXA IM Alts

$52.3bn

The French insurer’s asset management arm hails its third appearance in the top 10 after seeing a huge increase in its debt funds over the past year. Although the firm came in fifth in 2019 with $35 billion, this year it jumps into second place with $52.3 billion of debt capital raised over the previous five years. The asset manager undertook a major restructuring of its various alternative investment capabilities into a single division led by real assets chief executive Isabelle Scemama. The firm said the move was made in response to increased appetite for alternatives from investors operating in a low interest rate environment.

3. Blackstone

$47.4bn

The alternative assets giant drops down from second place to third this year after a relatively slow level of growth in debt assets raised. Last year the firm raised $45.2 billion of capital. Although this year it has increased the total to $47.4 billion, the gap with Ares has widened. That said, Blackstone was able to raise an $8 billion real estate debt fund that closed in September, after the PDI 50 cut-off date, which may help to boost its place in next year’s ranking. The firm also suffered first-quarter losses in its credit business as economies around the world shut down to try and prevent the spread of the coronavirus.

4. Goldman Sachs Merchant Banking Division

$46.4bn

Coming in just behind Blackstone with $46.4 billion of capital raised, Goldman Sachs also drops from third place in last year’s ranking, having posted a slower level of growth in its assets from $44.7 billion in 2019. Like other firms in the top 10, it has a substantive fund close that took place shortly after the cut-off period. It announced that its West Street Strategic Solutions Fund I had reached a first close in July with $6.4 billion of a $10 billion target, further heating up the competition for next year’s ranking.

5. HPS Investment Partners

$45.1bn

HPS Investment Partners has been highly active in fundraising during the qualifying period, and this has pushed the firm up from seventh in 2019 to fifth this year. Although in 2019 HPS had raised $34.6 billion in the proceeding five years, this jumped to $45.1 billion in 2020. This was helped in large part by its $9 billion mezzanine fund, which had been raising throughout the period but held a final close in October. Achieving fifth place follows on from a rapid rise up our ranking. Less than $2.5 billion of assets separate third and fifth place this year.

6. M&G Investments

$37.8bn

The asset management arm of insurer M&G has been steadily growing its private debt assets this year and holds on to its sixth place. Although in 2019 it raised a total of $34.8 billion, that has climbed slightly to $37.8 billion. However, there is now a large gap of more than $7 billion between the top five and the rest, which means it may be harder for those lower down to increase their ranking in the future. Among M&G’s major achievements in the past 12 months has been to build a private credit team in Singapore and grow its Asia-Pacific portfolio to almost $500 million.

7. Intermediate Capital Group

$35.1bn

The London-based private markets investor has climbed one place this year while increasing its capital raised from $33.3 billion to $35.1 billion. Earlier this year the
firm revealed that both fundraising and origination efforts had been affected by the pandemic but forecast a strong recovery that could help push it ahead in next year’s ranking. ICG has been busy expanding its office presence across Europe and its real estate arm has been particularly active in the debt space, raising £500 million ($668 million; €563 million) for its fourth senior credit vehicle this year.

8. Oaktree Capital Management

$31.1bn

The distressed and special situations investor also managed to climb one place this year even though there was no increase in funds raised over the five-year period. Total fundraising dipped slightly to $31.1 billion, thereby illustrating some of the challenges the pandemic is causing for fundraisers. As a distressed investor, Oaktree is likely to be facing a significant period of investment opportunity owing to virus-related dislocation. But many investors have made significant commitments to distressed funds in recent years, which may be dampening demand for more. That said, the firm hit the market this summer with the 11th vintage of its Opportunities Fund series.

9. Lone Star Funds

$30.6bn

Demand for distressed vehicles has slowed as covid-19 drives many of those vehicles towards deployment, and this is reflected in Lone Star’s sharp drop in the rankings. Last year, the firm held fourth place with $39.3 billion raised; now it is in ninth place, with just $30.6 billion raised over the previous five years. Its fall is particularly remarkable as Lone Star has held the top spot three times since 2014 but has now given way to newer players in the private debt space. Last year, the firm raised its largest ever vehicle, Lone Star Fund XI, with $8.2 billion of commitments, which means it could certainly regain its place at the top with future fundraises.

10. Cerberus Capital Management

$28.5bn

Cerberus holds on to 10th place this year with $28.5 billion raised, a modest increase on last year’s $26.2 billion but not enough to push the firm further up the ranking. Cerberus is raising a number of different debt vehicles including its Loan Opportunities Fund IV, a residential property loan fund, and Corporate Credit Solutions Fund II, which it launched this year. The firm could be one to watch in the future. It has already rapidly climbed up the ranking from below 20th place in 2016 and offers a diverse range of strategies that are expected to perform well next year, including special situations and non-performing loans.