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North America-Based Fund Managers Prepare for the Road Ahead – November 2015

by Brian Lee

  • 20 Nov 2015
  • PD

According to Preqin’s Private Debt Online service as of November 2015, estimated North America-focused dry powder for all private debt strategies currently measures $118bn, a noteworthy 62% of global private debt dry powder ($191bn). Both the North American and global figures have increased overall since 2009, when $79bn in untapped capital was held by North America-focused funds, with a total of $105bn globally. The chart below details the annual breakdown of total private debt dry powder by strategy within North America, lending insight into what has driven the overall growth in the most active region in private debt.

Analyzing the historical breakdown by strategy shown in the chart above, it is clear that direct lending has driven fundraising growth and overall private debt dry powder levels in North America more than any other strategy since 2012. Distressed debt funds currently hold the highest levels of commitments with 32% of the total, surpassing direct lending. Direct lending constitutes 27.2% of the total, while mezzanine funds currently make up 26.6% of private debt dry powder. It could be inferred from the growing proportions of dry powder that distressed debt managers have increased fundraising efforts with potential transitions on the horizon on a macroeconomic level.

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