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Navigating Private Debt

Private Debt is a maturing asset class that has become an integral component of many institutional investors’ private markets portfolio due to its relatively lower risk and superior liquidity characteristics compared to private equity strategies.

Private Debt as an asset class that we know of today took shape in the early 2000s after the Dot Com bubble burst when many investors were left burned and looking for a relatively safe alternative in the alternatives market. Over the next two decades, private debt emerged to become the significant-other in buyout transactions and also a broader strategy that evolved with increasingly more fund managers raising private debt funds that also specifically focus on market subsegments such as senior, mezzanine, uni-tranche, sponsored and unsponsored deals. Private debt is more complex now than it ever has been in 20 years.

In this article, we will explore private debt trend developments and journey from a broader market level, to the net-to-LPs fund level, and then deep dive to the underlying deal level with the aim to gain a better understanding of the risk, return, liquidity and the operating characteristics of this strategy.

Article
Risk management
Portfolio management
Fund performance
Fund of funds

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Benedikt Hoefelmayr interviewed at BAI AIC 2024

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