6. HPS Investments $31.5bn (2016: 7)
New York-based HPS made its debut in the top 10 last year after completing its spin-out from JPMorgan. This year it bolstered its position in the ranking after adding nearly $9 billion to its total. At the turn of the year firm had closed two funds in quick succession, first reaching a close on its third mezzanine fund in December after collecting $6.6 billion – one of the largest capital raises for the year. The firm then reached a final close on its European asset-based lending fund in January after raising €800 million.
At the time of going to press, HPS also hit a final close of $4.24 billion for its HPS Specialty Loan Fund 2016, surpassing the $3.5 billion target. The firm began fundraising back in June 2016, and was already deploying capital by September. It has now made 16 investments with an average loan-to-value ratio of 54.7 percent. The firm will use the capital to issue senior debt across a diverse number of sectors in North America and Western Europe. Unfortunately, the close was too late to be included in this year’s five-year total, so we may yet see HPS climb even higher in next year’s ranking.
7. AXA Investment Managers $31.2bn (2016: 6)
AXA is the only European firm, other than M&G, to make the top 10. The French insurer led by Isabelle Scemama has slipped back one place in the ranking despite growing its five-year capital raising total by nearly $4.5 billion – further evidence that the difference between the largest firms is narrower than it has been in any previous year.
Paris-headquartered AXA has been rising to prominence for some time – it jumped five spots in last year’s ranking, and two spots the year before that. AXA has a large real estate debt investment business that comprises both insurance account money and capital raised via funds and separate accounts. In September, the company reached a final close on its 10th property debt fund with €1.5 billion raised – the bulk of which was raised by January, after just six months on the road. More than a quarter of the fund, named CRE Senior 10, has been deployed already. The vehicle’s final closing takes AXA IM – Real Assets’ total debt commitments to more than €14 billion.
8. Cerberus $24.3bn (2016: 28)
Cerberus is one of the biggest jumpers in the ranking having bounded 20 places to return to the top 10 after a two-year hiatus. The increase in capital raised – from $6 billion to $24.3 billion – can in part be attributed to a $4 billion close held for the firm’s hybrid equity and credit fund, Cerberus Institutional Partners VI, which reached its hard-cap with commitments from more than 150 investors in April. The close came a month after the firm closed its mid-market direct lending fund, Cerberus Levered Loan Opportunities Fund III, on $2.05 billion.
In January, the firm closed also its fourth global opportunistic real estate fund, Cerberus Institutional Real Estate Partners IV at $1.8 billion after raising capital from the likes of San Francisco Employees’ Retirement System, Florida State Board of Administration and the Texas Permanent School Fund. Cerberus now has more than $30 billion under management across three platforms: global credit opportunities (including corporate credit, distressed debt, and direct lending), private equity and real estate.
9. Goldman Sachs $24.2bn (2016: 8)
As an early leader in the nascent private debt space, Goldman Sachs has made the top 10 in every PDI ranking. The firm has slowly been slipping down the ranking, but this is more a consequence of other players coming to prominence rather than Gold- man Sachs diminishing. Indeed, the US investment bank’s private debt business has actually seen its total swell over the past 12 months from $19.7 billion to over $24 billion.
Comprising part of this new total is the $2.2 billion garnered for Broad Street Loan Partners III, a successor to the $3.16 billion Broad Street Senior Credit Partners, and $2.5 billion brought in for Broad Street Real Estate Credit Partners III, a successor to the $4.2 billion Fund II. More recently, Goldman Sachs’s latest mezzanine fund, GS Mezzanine Partners VII, hit the halfway point of its predecessor fund after raising $3.8 billion. The fund held an initial close of $730 million on 9 August, though not soon enough to be included in the total.
10. Ares Management $23.8bn (2016: 10)
Ares’ position in this particular ranking arguably belies its greater significance in the overall debt market. Not only is it one of the biggest private debt players in the US and Europe in the years following the financial crisis, but it also runs the largest public BDC, which for the purposes of this ranking have been counted separately.
The firm holds fast at number 10 but its total capital raised has gone up by $4.8 billion. Currently, the Los Angeles-based firm is closing in on its $2.5 billion target for its first private junior debt fund, having locked down $1.99 billion for Ares Private Credit Solutions, raising almost $400 million since the end of the second quarter, when the firm had raised slightly more than $1.6 billion. Though this is the first private vehicle to invest in junior debt, the firm has provided second lien and mezzanine debt for years through its BDC, Ares Capital Corporation.