GPs target $1bn-plus ABF raises next year as demand grows

Nearly half of general partners (GPs) are targeting asset-based finance (ABF) for capital raises above $1bn (£748.7m), as more limited partners (LPs) look to deploy into the sector.

A survey from DealCatalyst found that 25 per cent of LPs plan to allocate more than $1bn to ABF strategies over the next 12 months, with over 60 per cent targeting funds with more than $1bn in assets under management.

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LPs are also showing a clear preference for established managers, the survey found. Some 66 per cent said they would only allocate to incumbents, while just 10 per cent would consider backing new launches.

On regional exposure, more than 60 per cent of GPs reported appetite for European and UK investments, while ABF opportunities appear to be drawing LP interest disproportionate to the market’s size.

DealCatalyst’s inaugural ABF Capital Flows Survey polled 120 LPs, GPs and borrowers across North America and Europe.

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“The survey confirms ABF’s evolution from a niche to a mainstream private credit strategy,” said Todd Anderson, head of content and programming at DealCatalyst. “As ABF becomes further institutionally entrenched, we’re seeing clear patterns in how capital will move through the ecosystem.”

The survey also highlighted a widening gap between deployment sizes as half of managers are targeting individual deployments under $50m, while borrowers are seeking financings of $250m or more, a mismatch that DealCatalyst says could open the door for banks to step in.

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