Private debt is a very popular asset class, but the sector has
never faced a market downturn. Nicholas Pratt explores the
operational challenges that could occur when it does.
In 2019, the private debt fund market has seen its first
slowdown in fundraising after several years of stellar growth.
According to a report from research firm Preqin, private debt
fundraising in the third quarter "continued at the lacklustre
levels that have characterised 2019 so far".
Yet fundraising levels remain historically high – and
although returns from private debt funds have slowed this year,
they still outperform other alternative asset classes such as
natural resources and real estate. Preqin said the asset class is
"proving its ability to provide a sustainable and reliable
income stream to investors, and therefore protection on the
downside". Assets under management in private debt were $751
billion (€677 billion) globally at December 2018 – down
from $769 billion six months
