KYI: Know Your Investment

What do Global Private Credit Funds do?

Global Private Credit Funds are investment vehicles that
specialize in providing debt financing to companies
outside of traditional banking channels. These funds
often target mid-sized companies, offering various debt
structures such as direct loans, mezzanine financing,
distressed debt, and more.

Why Invest in Global Private Credit Funds?

Investing in Global Private Credit Funds can offer higher yields
compared to traditional fixed-income investments, with the
added benefit of diversifying credit exposure. These funds
play a critical role in financing businesses, often
accompanied by detailed covenants and security provisions
that provide layers of protection for investors.

Global Private Credit Market Trends

  • Private debt has firmly established its presence within the portfolios of many investors, providing a hedge against inflation and interest rate fluctuations, along with an attractive risk-return balance. The projections indicate that private debt will maintain its position as one of the fastest-growing alternative asset classes in the coming five years, with assets under management (AUM) forecasted to reach $2.3 trillion by December 2027, reflecting a compound annual growth rate (CAGR) of 10.8%. (Source: Preqin)
  • The total Private markets assets under management (AUM) reached $11.7 tn as of June 30,2022. (Source: Mckinsey & Co.)
  • Today, private credit represents more than 20% of the US market for below-investment-grade credit, up from 5% in the mid-2000s , and plays an important role in financing large transactions. (Source: Blackstone)
  • The total capital raised by 137 private debt funds closed during the first three quarters of 2022 $172.1 bn (Source: Preqin)

Source: Blackstone - Advisor Trends in Private Markets 2023

  • According to a recent survey conducted by Blackstone among top-ranked advisors, there has been a notable surge in the adoption of alternative investments. Specifically, 71% of advisors now allocate a portion of their clients' portfolios to alternatives, with allocations ranging from 6% to 20%.
  • Furthermore, the survey revealed that 15% of these surveyed advisors allocate more than a fifth of their client portfolios to alternative investments, demonstrating consistency with the previous year's data.

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