Established managers continue to dominate private debt fundraising

The most established private credit managers continue to attract the vast majority of funds, according to new research.

PitchBook’s first-quarter global private markets fundraising report found that 97.8 per cent of the fundraising over that period went to established managers, and the 10 largest funds attracted almost 75 per cent of the commitments.

Of the 25 fund closes it tracked in the first quarter, there were no first-time funds and only three funds from emerging firms.

“In a flight to quality after the pandemic, LPs have leaned into blue-chip managers,” said Nathan Schwartz, quantitative research analyst at PitchBook.

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The report also showed that funds are staying open longer to hit larger fundraising totals. The median time to close a fund is the highest that PitchBook has tracked to date, at 19 months.

PitchBook’s research found that private debt fundraising posted the weakest start to a year since 2016, with just $30.4bn (£23.9bn) in fund closes. This was down from $56bn raised in the first quarter of 2013.

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However, it said that this can be partially attributed to the fact that several large funds closed in 2023, so the first-quarter decline represents a natural lull in the fundraising cycle.

Benefit Street Partners closed the largest fund of the quarter, at $4.7bn, which is far smaller than the largest funds of 2023.

However, PitchBook highlighted that the five largest open private debt funds are all targeting $10bn or more.