Risk-Adjusted Returns are the new key measure to understand how private debt performs versus other asset classes like buyouts, stocks, fixed income, etc.
During the run-up to the global financial crisis, median IRR returns declined significantly from almost 30% IRR in the early 2000s to nearly 10% IRR in 2007/2008. This trend aligns with the increasing leverage multiples and loss rates during that period. By 2009, investment deal activity in the industry as a whole was essentially at a standstill as governments around the world were working out and implementing financial stimulus (i.e. liquidity) packages to get their economies going again.
The full Private Debt Market Report contains:
Default Ratios Overview
Performance and Structure of Sponsored vs. Non-Sponsored Transactions
Special Analysis (Trends on the Private Debt Market)