Despite an uncertain economic environment, investors continued to allocate capital to private debt at a similar pace to recent years in 2022. RJ Joshua outlines some of the key themes of our Preqin Global Report 2023: Private Debt and why the asset class continues to be an attractive choice for investors.

Transcript:

In the 2022 Global Private Debt Report, we forecast AUM will grow to $2.3tn in 2027 – strong growth, although a slightly slower pace than in recent years for both fundraising and performance. We expect AUM growth to be strongest in North America, with Europe leading in fundraising as it has more capacity for its market to mature. 

Based on the first cut of our data to the end of Q3 2022, $172bn was raised by private debt funds globally, and total funds raised are expected to be broadly similar to 2021. Despite the strength in overall fundraising, a more fragile picture emerges when we delve into the details, with the number of funds closed decreasing substantially.

This suggests investors remain positive on the asset class but are becoming more discerning in their allocations, with larger commitments going to fewer managers. Nevertheless, a strong Q4 remains a possibility and sentiment may improve in 2023 if the pace of central bank action becomes more certain.