Private debt secondary market to see higher deal flow
The private debt secondary market will see increased deal flow and lower discounts this year, a new survey has concluded.
Ely Place Partners’ latest Private Debt Secondary Market Survey found that the year ahead will see a “large growth in volume” and quantity of deals, as the sector matures.
Increased competition and a stabilising economy could also lead to higher pricing, the survey found.
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Deal volume is expected to increase by between 50 and 100 per cent this year, with up to $15bn (£11.96bn) of closed transactions predicted.
Ely Place Partners found that high-quality senior loans would be particularly popular this year, with LPs driving the vast majority of these deals. Pensions funds are expected to be the largest sellers.
“Private debt secondary deals have been growing steadily in size and number over the past twelve months,” said Daniel Roddick, founder at Ely Place Partners.
“The establishment of a dedicated buyer universe has given LPs confidence to bring large portfolios to market.
“At the same time, GPs are proactively taking advantage of the market to accelerate liquidity for their investors.”
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The survey asked a number of specialist investors for their views on the state of the private debt secondary market, with some respondents offering much more optimistic predictions.
One stated that the private debt market will grow to between $2tn and $2.5tn this year, with one to 1.5 per cent of that changing hands in the secondary market.
Another investor predicted that deal flow for 2024 could be as high as $50bn.
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