View all insights
image

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

Read next

image

Despite Macro Headwinds, CEPRES Expects Private Equity Valuations to Hold Up in 2023

Over the past four years, private market investors have confronted three significant macro shock events — the COVID-19 pandemic, the war in Ukraine and 40-year inflation highs. As the market faces intersecting headwinds of geopolitical instability, inflation and volatility, CEPRES evaluated how asset owners are managing their holdings.

image

Private Equity Exits Tumble to Decade-Long Low as Managers Hold Back

Private equity fund managers have sharply pulled back on sales of their portfolio companies this year, with exits from their strategies perhaps the most visible evidence of a weakening market that has seen declining valuations, slower fundraising and other flagging indicators.

image

Venture Managers Hit Fundraising Record, But Warning Signs Flash

New forecasting based on recent economic shocks predicts venture distributions to slow by 2024, deferring into later years, with the peak drop of 79% coming next year.

Client Exclusives

Private credit: Spotlight on deals — the winners and losers & bounce back from the crisis

Read more
image

Navigating Private Debt: A Deep Dive into Historical Risk and Returns

Read more
image