Inflation concerns marred private debt fundraising in Q1 2021, with the number of funds closed at its lowest quarterly total in five years, since Preqin began tracking the asset class. To some extent, this feeds into the record-high 592 funds left on the road, which are targeting $300bn in capital. In spite of pandemic support packages across the globe, private debt performance has suffered somewhat; the asset class generated a -2.4% return in the 12 months to September 2020, with distressed debt hit hardest at -8.0%. For the next 12 months, investors are looking ahead to distressed debt and special situations funds in anticipation of the potential for some companies to come under strain when support packages are withdrawn.
Read our latest private debt industry update for a detailed look at fundraising, funds in market, investors, and performance & dry powder in the first quarter of the year.