The Hottest Private Debt Managers
The booming sector’s top 100 fund managers account for almost three-quarters of all capital raised over the last decade, Preqin data show.
Private debt fundraising is dominated by just a small number of firms, according to new analysis from alternatives data firm Preqin.
The 100 biggest private debt managers have received roughly $626 billion in investor commitments over the last ten years, or 72 percent of the total capital raised, Preqin said Thursday. The group represents just 15 percent of the total number of firms that raised funds in the last decade.
The largest private debt manager, Oaktree Capital Management, alone raised $51.5 billion during the same period – about $14 billion more than its closest competitor for the title, Goldman Sachs Group’s merchant banking division, according to the data provider’s report.
“Investors look to allocate with larger fund managers often because of these fund managers’ proven track records and extensive resources,” said Tom Carr, Preqin’s head of private debt, in the firm’s statement.
Similar patterns have occurred in other private capital segments, including private equity and real estate, where the dominant general partners have a disproportionately large market share. But Carr said the high level of concentration in private debt was “notable” due to it being “newer and faster-growing” than other private capital industries.
“With these larger firms also targeting an outsized proportion of capital currently being sought from investors, this trend seems likely to continue in the foreseeable future,” he added.
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According to Preqin, the top 100 firms are currently raising a combined 51 private debt funds, with an aggregate target of $48 billion. The largest currently in the market is Fortress Investment Group’s Fortress Credit Opportunities Fund V, which is seeking $5 billion to invest primarily in European distressed debt opportunities.
So far, 88 private debts funds have closed this year, having brought in a total of $90 billion in investor commitments. Goldman Sachs Merchant Banking Division has closed the largest fund so far, with its GS Mezzanine Partners VII securing $13 billion to issue debt across North American and Europe.