Private credit performance varies widely across strategies and geographies, from a high of 27.2% to a low of 8.1%
February 21, 2025 (Preqin News) – Listed alternatives managers reported strong credit inflows during their fourth-quarter 2024 results presentations. Across all public and private credit strategies, the eight largest listed debt managers raised $505.5bn last year.
The sustained interest in credit is not unique to these eight large fund managers. Private debt fundraising remained stable last year with GPs raising $217.9bn, a small increase from the $216.8bn raised in 2023. Capital raised for the other private markets asset classes fell from $1.24tn in 2023 to $0.96tn last year. There are currently 1,345 private debt funds raising capital targeting a total of $490.4bn, according to Preqin data.
‘More clients are attracted to credit and, in particular, the credit strategies we're focused on including real asset finance, asset-backed finance, and Oaktree's opportunistic strategies,’ Hadley Peer Marshall, Chief Financial Officer at Brookfield, told analysts on the firm’s earnings call.
Private credit performance varied between listed managers from a high of 27.2% for Ares’ APAC Credit strategy to a low of 8.1% for Apollo’s Multi-Credit strategy. The eight GPs - Apollo, Blackstone, Ares, Brookfield, KKR, Carlyle, Blue Owl, and TPG - reported their results in different ways, with some combining both public and private credit strategies in performance metrics.
Blackstone’s President and Chief Operating Officer, Jon Gray, expects absolute returns from private credit to fall but is confident that the asset class will continue to deliver a premium. ‘I think the key thing to remember for investors is they may not be able to produce mid-teens returns in private credit on a go-forward basis, but the relative returns and the spread premium to fixed income, to liquid fixed income, is continuing to endure,’ he told analysts on the firm’s investor call.
Here are the highlights, by credit assets under management:
Apollo Global Management
Apollo’s Direct Origination strategy appreciated by 12.8% in 2024, the highest of all its credit strategies. Asset-Backed Finance returned 11.2%, followed by Opportunistic Credit at 10.2%, and finally, Multi-Credit at 8.1%.
The firm’s credit AUM increased by over $100bn in 2024, rising from $515.5bn in 2023 to $616.4bn at the end of 2024.
Apollo’s credit dry powder climbed from $29bn in 2023 to $36bn in 2024. However, the firm changed how it reported results, removing the ‘hybrid’ classification from breakdowns, so the numbers are not directly comparable.
Apollo secured $142.6bn of inflows to credit strategies last year and had $52.2bn of outflows.
The firm has eight private credit funds in market, including two perpetual vehicles, according to Preqin data.
‘It is clear the tone of bank regulation is appropriately getting better. Banks will be stronger competitors in what we call direct lending or a small portion of our private credit business. This is appropriate. This is logical. I don’t think it really matters to us per se,’ Marc Jeffrey Rowan, CEO, Co-Founder, and Director at Apollo, said on the firm’s earnings call.
Blackstone Group
Blackstone’s gross returns in 2024 were 15.7% in Private Credit and 9.5% in Liquid Credit. Net returns were 11.6% for Private Credit and 9.0% for Liquid Credit, below 2023’s net returns of 12.1% and 12.4%, respectively.
The firm’s credit and insurance AUM increased 20.1% from $312.7bn in 2023 to $375.5bn last year. It announced $91.2bn of inflows in 2024, up from $62.5bn in 2023.
Credit & Insurance dry powder fell from $45.0bn in 2023 to $40.1bn in 2024.
Blackstone’s deployments increased from $31.0bn to $63.8bn in the Credit & Insurance division, while realizations were up from $20.4bn to $33.3bn.
Blackstone currently has seven private credit funds in market, including Blackstone Capital Opportunities Fund V, which is looking to raise $10bn, according to Preqin data.
‘We’re seeing interest in investment-grade private credit now from some of our pension and sovereign wealth funds. It’s very early days, but it feels like that’s going to grow in momentum. Overall, insurance feels like an area where we’re going to see a lot of growth in the years ahead, particularly at Blackstone,’ Jon Gray, President and Chief Operating Officer at Blackstone, told analysts on the firm’s investor call.
Ares Management
Ares’ Alternative Credit strategy returned 11.2%, Opportunistic Credit 12.8%, and European Direct Lending 11.9%. Its US Senior and Junior Direct Lending strategies returned 17.1% and 15.0%, respectively. Ares reported 27.2% gross return from its APAC Credit strategy in 2024.
Ares private debt AUM grew from $299.4bn in 2023 to $348.9bn in 2024, an increase of 16.5%.
The credit group announced commitments of $69.1bn in 2024, including $24.2bn for its US Direct Lending strategy, $16.4bn for BDCs, and $12.0bn for European Direct Lending.
The firm’s credit dry powder grew from $81.3bn in 2023 to $100.1bn last year. Credit deployments from drawdown funds increased by 20.1% to $38.9bn in 2024.
Ares Special Opportunities Fund III, launched last year, is looking to raise $7bn, according to Preqin data.
‘We believe that rates are going to be higher for longer. I think we now have stability in rates that's bringing capital off the sidelines in private credit and real estate in a way that we didn't see particularly in the first half of last year,’ Michael Arougheti, CEO of Ares, said on the earnings call.
Brookfield Asset Management
Brookfield’s best-performing credit fund, its 2021-vintage Oaktree Opportunities Fund XI, currently has a 16% gross IRR and an 11% net IRR. Its 2016 Fund X is reporting a gross IRR of 14% and a net IRR of 9%
Brookfield’s Credit AUM grew from $217bn at the end of 2023 to $317bn as of December 2024, an increase of 46.1%.
Credit deployments were $26.2bn in 2024.
The firm has $34bn of uncalled commitments to deploy, up by $11bn from 2023.
Brookfield raised $102.7bn for its credit strategies last year across its Insurance and SMAs ($66.8bn), Oaktree ($28.9bn), Long-term and Perpetual Funds ($4.9bn), and Public Securities ($2.1bn). Overall, the firm raised $136.7bn across all asset classes last year.
Brookfield has partnered with Société Générale for two private debt funds, and Oaktree’s 2023 real estate credit fund is looking to raise $1bn, according to Preqin data.
‘It was this time last year that we formally launched our credit group, which brought together our long-standing credit capabilities across the firm with our growing portfolio of credit-focused partner managers. The purpose was to coordinate our credit strategies across asset classes and to accelerate the growth of this business, and we are already seeing meaningful benefits of these efforts,’ Connor Teskey, President of Brookfield, said on the earnings call.
KKR
KKR’s Leveraged Credit Composite reported a gross return of 10%, and its Alternative Credit Composite appreciated by 12%.
Its Credit and Liquid AUM also grew from $245.5bn in 2023 to $276.2bn at the end of last year, which includes $130bn of Leveraged Credit, $41bn in Direct Lending, and $68bn in Asset-Backed Finance. Alternative and Leveraged Credit account for 21% of KKR’s total AUM.
KKR invested $38.6bn across Credit and Liquid strategies last year, an increase of 157.1% from $15.0bn last year. Credit and Liquid fundraising also grew from $46.6bn in 2023 to $56.3bn last year.
KKR has $21.4bn of dry powder in its Credit and Liquid Strategies, up from $16.5bn in 2023.
KKR is looking to raise at least $11bn from its private credit funds in market, according to Preqin data.
‘We expect our reach will expand to a new client base as we continue to track towards the launch of our two hybrid credit products in the first half of 2025. These are developed exclusively in partnership with Capital Group targeting the mass affluent,’ Robert Lewin, KKR’s Chief Financial Officer, said on the earnings call.
Carlyle Group
Carlyle’s Global Credit segment appreciated 12% in 2024.
Global Credit AUM increased 2.4%, from $187.8bn in 2023 to $192.4bn at the end of 2024.
The firm announced credit inflows of $17.3bn in 2024 and deployments of $24.5bn. The firm reported $4.1bn of realizations from its credit funds.
Carlyle’s Global Credit dry powder increased from $16bn in 2023 to $18bn at the end of 2024.
The firm has seven credit funds in market, including four open-ended direct lending funds, according to Preqin data.
‘We expect inflows in 2025 to be similar to 2024 levels. Credit is once again poised to raise the most capital across our platform, and we have a diversified fundraising pipeline across all segments,’ John Redett, CFO and Head of Corporate Strategy at Carlyle, said on the earnings call.
Blue Owl Capital
Blue Owl announced gross returns of 13.9% for Direct Lending.
The firm’s Credit AUM grew from $84.6bn in 2023 to $135.7bn in 2024, an increase of 60.4%. It also has $106.3bn of permanent credit capital.
Blue Owl raised $13.9bn for the credit platform in 2024 and deployed $16.6bn in 2024.
Blue Owl has three funds in market, according to Preqin data. Its second Opportunistic Lending Fund is seeking $2.5bn.
‘We view alternative credit as a strategically important expansion of our credit capabilities, focused on lending to Main Street segments such as consumer spending, small business borrowing, and residential finance. These complement the corporate leaning of our direct lending businesses very nicely. Not only are the Main Street opportunity sets very significant in their own right, but having a scaled alternative credit capability under the umbrella sharpens our 30,000-foot view of the broader credit marketplace,’ Marc Lipschultz, Co-CEO of Blue Owl Capital told analysts on the earnings call.
TPG Angelo Gordon
TPG’s Credit segment returned 13.4% in 2024.
The firm’s Credit AUM grew by 21.3% over the year, from $59.6bn in 2023 to $72.4bn at the end of 2024.
It raised $12.4bn for its Credit segment in 2024, a huge increase from the $0.7bn raised in 2023.
Credit deployments ($16.2bn) exceeded realizations ($7.5bn), although dry powder increased from $7.1bn in 2023 to $12.3bn in 2024 thanks to strong fundraising.
TPG will be active in the fundraising market with private credit funds across direct lending, special situations, distressed debt, and real estate credit, according to Preqin data.
‘We’ve continued to be extremely active in introducing our credit teams to our most important firm-wide client relationships. Many of the dialogues are focused on scaled, multi-product credit commitments, and we anticipate meaningful conversions in 2025,’ Jon Winkelried, CEO of TPG, said on the firm’s earnings call.
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