One strategy accelerates as others hit the brakes

North American fundraising has been slowing down, but there is fresh momentum for subordinated debt.

Based on the evidence of the first half of the year, private debt fundraising for North America-focused vehicles may struggle to top the fundraising low-point reached in 2016 – never mind the record tally recorded last year. Less than $17 billion was collected in the first six months, compared with more than $70 billion in the whole of last year, as investors perhaps grew wary of what looks like an increasingly heated market.

However, when it comes to funds currently being raised, it is clear that there is considerable optimism around subordinated and mezzanine debt – with a number of multi-billion dollar vehicles seeking capital. What is also clear is that the recent dominance of senior debt strategies appears to be coming to an end, with fewer of these funds in the market than we have seen in recent years.