Strategy in Focus: Special Situations and Mezzanine

In our latest Strategy in Focus report, we present a guide for LPs to two of the most recently discussed fund strategies in private debt. We examine AUM growth, performance and investor interest as the economic mood shifts

• Special situations funds have outraised distressed debt since 2022 as mandates evolve beyond specific points in the economic cycle

• Average performance of special situations funds is less connected to distressed debt since COVID-19; average median IRR of 8% since 2014

• Mezzanine debt's share of private debt AUM has steadily declined since a peak in 2006 but investor interest is returning