PREQIN QUARTERLY UPDATE: PRIVATE DEBT Q2 Insight on the quarter from the leading provider of alternative assets data Content includes: Fundraising Funds in Market Institutional Investors Dry Powder Deals Fund Performance alternative assets. intelligent data.
PREQIN QUARTERLY UPDATE: PRIVATE DEBT, Q2 FOREWORD - Ryan Flanders, Preqin Momentum from record private debt fundraising at the end of 2016 has slowed slightly throughout the first half of, which has been headlined by three fund closures north of $3bn, including Cerberus $4bn distressed debt fund closed in Q2. Twenty-eight private debt funds closed in the second quarter of, securing an aggregate total of $16bn in capital commitments globally down from $26bn in Q1. This is the first time since Q2 2014 ($19bn) in which Q2 private debt fundraising has not surpassed $20bn. Distressed debt funds, while representing only two of the 28 private debt funds closed in Q2, accounted for 34% ($5.5bn) of total capital raised. Direct lenders enjoyed continued fundraising success, raising a combined $6.4bn, with strong investor interest prevailing in the US and Europe. Since the beginning of 2016, direct lending funds have secured $46bn raised across 82 funds, a substantial figure which has put the strategy squarely in sight for institutional investors looking to generate returns in a low interest rate environment. With the addition of private debt deals to Preqin s platform, this Quarterly Update now includes sample deals from the first half of, as well as industry and geographic breakdowns for private lending transactions. In H1, 68% of private debt deals took place in North America, as the home of the most fundraisers, investors and borrowers in a single region globally continues to push forward. Near-record levels of dry powder in the industry could be putting pressure on the fundraising market, as managers are currently saddled with $205bn in available private debt capital. With dry powder at such high levels, managers may be cautious with fund sizes moving forward, hoping to temper investor expectations with deal flow and interest rate projections in the future. We hope that you find this report useful and welcome any feedback you have. For more information, please visit wwww.preqin.com or contact info@preqin.com. p3 p5 p6 p7 p9 p10 p11 p12 Private Debt Opportunity in India, Edelweiss Fundraising Funds in Market Deals Institutional Investors Dry Powder Fund Performance Conferences PRIVATE DEBT ONLINE Private Debt Online is the leading source of data and intelligence on the growing private debt industry and tracks all aspects of the asset class, including fund managers, fund performance, fundraising, institutional investors and more. Constantly updated by our team of dedicated researchers, Private Debt Online represents the most complete source of industry intelligence available today, with global coverage and all fund managers and investors profiled. Get in touch today to arrange a demo of Private Debt Online: : info@preqin.com : www.preqin.com/privatedebt All rights reserved. The entire contents of Preqin Quarterly Update: Private Debt, Q2 are the Copyright of Preqin Ltd. No part of this publication or any information contained in it may be copied, transmitted by any electronic means, or stored in any electronic or other data storage medium, or printed or published in any document, report or publication, without the express prior written approval of Preqin Ltd. The information presented in Preqin Quarterly Update: Private Debt, Q2 is for information purposes only and does not constitute and should not be construed as a solicitation or other offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or as advice of any nature whatsoever. If the reader seeks advice rather than information then he should seek an independent financial advisor and hereby agrees that he will not hold Preqin Ltd. responsible in law or equity for any decisions of whatever nature the reader makes or refrains from making following its use of Preqin Quarterly Update: Private Debt, Q2. While reasonable efforts have been made to obtain information from sources that are believed to be accurate, and to confirm the accuracy of such information wherever possible, Preqin Ltd. does not make any representation or warranty that the information or opinions contained in Preqin Quarterly Update: Private Debt, Q2 are accurate, reliable, up-to-date or complete. Although every reasonable effort has been made to ensure the accuracy of this publication Preqin Ltd. does not accept any responsibility for any errors or omissions within Preqin Quarterly Update: Private Debt, Q2 or for any expense or other loss alleged to have arisen in any way with a reader s use of this publication. 2 Preqin Ltd. / www.preqin.com
DOWNLOAD DATA PACK: www.preqin.com/quarterlyupdate PRIVATE DEBT OPPORTUNITY IN INDIA - Venkat Ramaswamy, Edelweiss There has been significant interest in and conversation on private credit in the US and Europe over the last few years; however, Edelweiss has been focused on India. Can you explain the dynamic there, as opposed to the more often discussed US and European markets? Edelweiss focus on private debt has been driven by the structural growth story in India, which is reinforced by a stable and development-oriented government. Bank credit growth has tapered while the corporate bond market is only just starting to develop. With India transitioning from a $2tn to a $5tn economy over the next decade, it creates a huge opportunity for capital solution providers. This has led to an increased requirement for capital from corporate sponsors/entrepreneurs and real estate developers for growth/acquisitions. Additionally, there is a huge potential opportunity, which started over the last three years, to invest in special situations in stressed operating companies. Private debt in India today is considered as a real alternative to private equity by entrepreneurs in corporate India, as well as by RE developers. The implementation of the Insolvency and Bankruptcy Code (IBC) has further made the private debt opportunity more attractive for foreign investors. What are the risks of investing in India as opposed to the more developed US and European markets? Investing in India requires a thorough understanding of the borrower and their situation. It requires an institutional framework for practical and effective risk management, along with significant local knowledge and presence. India has an effective but slow legal system. In 2002, the SARFAESI Act (Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest) was enacted to protect the rights of secured lenders and licences were awarded to Asset Reconstruction Companies (ARC). Edelweiss is the largest ARC in India with AUM of ~$6bn. Subsequently, to address the needs of all creditors (secured, unsecured, operational and financial), the government earlier this year enacted the IBC, which forces the lenders to come together and decide on a resolution strategy within a defined timeframe. Failing which, there is a threat to liquidation. Another risk is the absence of India-based operational turnaround teams. Also, investors are exposed to currency risk. However, India s macroeconomic strength, as well as the global commodity slowdown, supports the probability of a stable Indian rupee. What sort of deals are you looking at in India? Primarily growth/rebuilding-focused situations, including: Financing for investing in operating companies, financing for equity buyout from PE investors, asset acquisition, etc. Providing structured credit solutions to residential RE developers primarily for project construction post all significant zoning/government approvals. Credit solutions to stress/distress companies buyout of bank loans to restructure for value creation/ priority debt for working capital requirements/primary capital for lastmile financing. What do you see as the opportunity in credit in the shorter and longer terms in India? We look at private debt as a structural opportunity in India, driven by the Indian growth story and the inability of traditional sources of funding, especially governmentowned banks, to meet the requirements due to their internal constraints. Sponsors of Indian companies will have increased funding requirement for their expansion/acquisitions as the current environment is seen as the beginning of an investment cycle. The residential RE sector in India is $120bn and is growing at 5-8% per annum. The adoption of Real Estate Regulation Act (RERA) is expected to further encourage the RE demand. Increasing urbanization, a growing middle class, the rise of the services sector and the housing shortage will create significant opportunity to provide funding to developers to bridge this demand. Industrial stressed asset loans are concentrated in specific sectors with infrastructure, metal & mining, engineering & construction contributing more than 70% of the total $104bn of industrial stress. These sectors are primarily cyclical in nature and are now at the cusp of the beginning of the growth cycle. VENKAT RAMASWAMY Venkat Ramaswamy is Executive Director of Edelweiss Financial Services Limited, one of India s leading financial services companies. He co-founded Edelweiss in 1996, which over the last two decades has become a diversified financial services company with various Credit & Non Credit businesses and a young Life Insurance business. Venkat has been one of the driving forces in transforming what was once India s first new age boutique investment bank to a leading diversified financial conglomerate. Amongst his responsibilities, he also Co-Heads two of Edelweiss most strategic businesses Distress Assets & Resolution business and Global Asset Management business, while continuing to play a mentorship role with the Edelweiss Investment Banking business. www.edelweissfin.com 3
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DOWNLOAD DATA PACK: www.preqin.com/quarterlyupdate FUNDRAISING Twenty-eight private debt funds reached a final close in Q2, totalling $16bn in capital commitments (Fig. 1). Quarterly fundraising since 2013 has seen an average of 37 funds secure around $22bn in aggregate capital, with an average fund size of $595mn. Q2, for which figures are likely to increase as more data becomes available, currently has an average fund size of $552mn. Nineteen North America-focused funds reached a final close in Q2, securing $13bn in aggregate capital (Fig. 2). Five Europe-focused funds raised a total of $2.2bn, while four funds targeting Asia & Rest of World brought in an additional $200mn. Direct lending and distressed debt vehicles together accounted for 75% of all capital secured by private debt funds closed in Q2, raising $6.4bn and $5.5bn respectively (Fig. 3). While direct lending accounts for the largest proportions of both funds closed (45%) and capital commitments (41%) for the quarter, distressed debt closed the smallest proportion (7%) of funds yet more than a third (35%) of capital. Nine mezzanine funds reached a final close for an aggregate $2.1bn and special situations funds raised $1.5bn across four funds; no venture debt or private debt funds of funds closed in the second quarter. Fig. 1: Private Debt Fundraising, Q1 2013 - Q2 60 50 40 30 20 10 0 32 15 36 35 53 28 36 34 19 22 18 17 19 13 46 25 36 35 29 45 45 Cerberus Capital Management s Cerberus Institutional Partners VI was the largest fund ($4bn) closed in Q2, significantly ahead of Permira Debt Managers Permira Credit Solutions Fund III, which secured 1.7bn. Cerberus vehicle will target distressed debt in North America, while Permira s will follow a direct lending strategy in Europe (Fig. 4). 24 32 23 14 11 40 22 34 13 52 50 27 28 26 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2013 2014 2015 2016 Date of Final Close No. of Funds Closed Aggregate Capital Raised ($bn) 16 Fig. 2: Private Debt Fundraising in Q2 by Primary Geographic Focus 20 18 16 14 12 10 8 6 4 2 0 19 13.1 5 North America Europe Asia & Rest of World No. of Funds Closed 2.2 Primary Geographic Focus Aggregate Capital Raised ($bn) 4 0.2 Fig. 3: Private Debt Fundraising in Q2 by Fund Type 14 13 12 10 9 8 6.4 6 5.5 4 4 2 2 2.1 1.5 0 Distressed Debt Mezzanine Direct Lending Special Situations Fund Type No. of Funds Closed Aggregate Capital Raised ($bn) Fig. 4: Five Largest Private Debt Funds Closed in Q2 Fund Firm Fund Size (mn) Type Geographic Focus Cerberus Institutional Partners VI Cerberus Capital Management 4,000 USD Distressed Debt North America Permira Credit Solutions Fund III Permira Debt Managers 1,700 EUR Direct Lending Europe PIMCO Corporate Opportunities Fund II PIMCO 1,503 USD Distressed Debt North America GoldPoint Mezzanine Partners IV GoldPoint Partners 1,300 USD Mezzanine North America Fundamental Partners III Fundamental Advisors 993 USD Special Situations North America 5
PREQIN QUARTERLY UPDATE: PRIVATE DEBT, Q2 FUNDS IN MARKET As at the start of Q3, there are 310 private debt funds in market seeking an aggregate $137bn in capital. These figures have increased over the previous quarter, when 260 funds were targeting $123bn globally at the start of Q2. Direct lending funds continue to represent the largest proportions of both funds in market and aggregate capital targeted (Fig. 5), with 144 funds seeking a total of $60bn. Forty-five distressed debt funds are in market targeting $33bn, while 63 mezzanine funds seek $14bn. Special situations funds, which account for 11% of funds in market, are seeking $28bn in aggregate capital. Compared with this time last year, North America-, Asia- and Rest of World-focused private debt funds have seen an increase in both the number of funds in market and targeted capital (Fig. 6). Europe has an additional five funds in market compared to the previous year, but these funds are targeting slightly less capital. The majority (51%) of private debt funds in market have been on the road for one year or less, and a further 34% have been in market for 13-24 months (Fig. 7). Fifteen percent of funds have been on the road for more than two years, including 1% that have been actively raising for more than three years. Fig. 5: Private Debt Funds in Market by Fund Type Proportion of Total 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1% 5% 2% 3% 11% 20% 20% 10% 14% 24% 46% 43% No. of Funds Raising Aggregate Capital Targeted Venture Debt Private Debt Fund of Funds Special Situations Mezzanine Distressed Debt Direct Lending The five largest funds in market account for roughly 20% of targeted capital within the private debt asset class. 3G Special Situations Fund V, launched in November 2016 and currently the largest fund in market, is seeking $10bn for special situations investment (Fig. 8). The fund will focus on distressed companies in the US across a broad range of industries. Fig. 6: Private Debt Funds in Market by Primary Geographic Focus, Q2 2016 vs. Q2 180 160 140 120 100 80 60 40 20 0 143 73.0 166 83.7 75 80 39.8 39.1 32 17 6.5 10.1 25 32 3.8 4.2 Q2 2016 Q2 Q2 2016 Q2 Q2 2016 Q2 Q2 2016 Q2 North America Europe Asia Rest of World Primary Geographic Focus No. of Funds Raising Aggregate Capital Targeted ($bn) Fig. 7: Time Spent on the Road by Private Debt Funds in Market Proportion of Funds in Market 40% 35% 30% 25% 20% 15% 10% 5% 0% 24% 6 Months or Less 27% 7-12 Months 34% 13-24 Months 14% 25-36 Months 1% More than 36 Months Time Spent on Road Fig. 8: Five Largest Private Debt Funds in Market Fund Firm Target Size (mn) Type Geographic Focus 3G Special Situations Fund V 3G Capital 10,000 USD Special Situations North America GSO Capital Solutions Fund III GSO Capital Partners 6,500 USD Distressed Debt North America Apollo European Principal Finance Fund III Apollo Global Management 4,000 USD Distressed Debt Europe HPS Specialty Loan Fund 2016 HPS Investment Partners 3,500 USD Direct Lending North America Park Square Capital SMBC JV Park Square Capital Partners 3,000 EUR Direct Lending Europe 6 Preqin Ltd. / www.preqin.com
DOWNLOAD DATA PACK: www.preqin.com/quarterlyupdate DEALS The first half of saw robust private lending activity in North America, which was home to 68% of private debt deals tracked by Preqin (Fig. 9). Due to a confluence of factors such as the regulatory environment, political structures and the slowdown of traditional lending, the private debt market has been mainly concentrated in North America and Western Europe. Activity up until the mid-2000s was dominated by distressed debt and mezzanine financing, but with direct lending activity having picked up momentum in the past decade, lenders throughout the capital stack continue to find many sponsored and non-sponsored deal targets in North America and Europe. More than 1,200 private debt fund managers are focused on opportunities in Europe and North America, but there is certainly private lending activity in other regions as well: Preqin s Private Fig. 9: Private Debt Deals Completed in H1 by Location Debt Online tracks 297 private debt managers targeting Asia, in addition to 227 focused across the Middle East, Africa and South America. The most transactions in H1 took place in the industrials sector, which accounted for 30% of all deals, double the proportion of the next most prominent industry (Fig. 10). As nearly 80% of tracked private debt deals are private equity sponsored, the private debt deals market is quite correlated to that of the buyout space. The remaining 20% of deals occur as non-sponsored transactions, issuing debt directly to borrowers that are not supported by private equity managers, and therefore can present a different risk profile entirely when compared to a sponsored firm. Fig. 10: Private Debt Deals Completed in H1 by Primary Industry 3% 14% Industrials 29% 68% North America Europe Asia & Rest of World 10% 6% 12% 30% 15% IT Business Services Healthcare Consumer Discretionary Food & Agriculture 13% Other Fig. 11: Sample Private Debt Deals Completed in H1 Portfolio Company Investment Type Primary Industry Debt Financing Provider(s) Cole-Parmer Instrument Company Soho House Group Mood Media Corporation Buyout Recapitalization Public-to-Private Healthcare Consumer Discretionary Telecoms, Media & Communications Angel Island Capital, Antares Capital, Golub Capital, Jefferies Capital Partners Debt Size ($mn) Capital Structure 630 Senior Debt Permira Debt Managers 351 Senior Debt HPS Investment Partners 315 Senior Debt Rex Energy Growth Energy & Utilities Angelo, Gordon & Co 300 Senior Debt Halogen Software, Inc. Add-on IT Golub Capital 286 Unitranche Riverview Power Recapitalization Energy & Utilities Ares Capital 250 Senior Debt TestEquity LLC Buyout IT NXT Capital 116 Senior Debt Echelon Growth Energy & Utilities Monroe Capital 100 Senior Debt Results Physiotherapy Growth Healthcare Golub Capital 71 Unitranche Catalina Holdings (Bermuda) Growth Business Services Twelve Capital 46 Junior/Subordinated 7
PREQIN QUARTERLY UPDATE: PRIVATE DEBT, Q2 SPECIALTY 8TH FINANCE SUMMITMIT SEPTEMBER 13 & 14, NEW YORK Use discount code PREQIN for 10% off KEY TOPICS TO BE COVERED INCLUDE: Latest macroeconomic trends and geopolitical events impacting the specialty fi nance industry Regulatory developments shaping the specialty finance landscape and new players and partnerships emerging in the marketplace Get up-to-date information on new asset classes, sectors and geographies for continued returns in a risky market Update on traditional middle market lending, online marketplace lending, and new fintech developments affecting your investments The future of securitization with new compliance requirements impacting investment opportunities and the ability to lend Strategies from top lenders and originators in raising capital and reaching borrowers and investor appetite across specialty finance sub-classes and expected risk tolerance for the coming year REGISTER TODAY AT www.iglobalforum.com/spfinance8 alternative assets. intelligent data. September 26th, Global Distressed Investments Forum London, 8 Marriott Grosvenor Square Contact: info@wjglobalgroup.com Preqin Ltd. / www.preqin.com ph. +420 222 947 912
DOWNLOAD DATA PACK: www.preqin.com/quarterlyupdate INSTITUTIONAL INVESTORS Tracking more than 2,800 active investors in private debt globally, Preqin s Private Debt Online collects detailed allocation plans from the widest range of investors in the alternatives industry. As at the end of Q2, the 10 largest investors in private debt currently allocate a combined $75bn to the asset class. Since Q2 2016, mezzanine has seen the largest change in investor appetite among private debt strategies, with the proportion of investors actively seeking mezzanine opportunities in the year ahead growing from 39% to 51% (Fig. 12). At present, direct lending and distressed debt are each targeted by 45% of active investors, followed by special situations at 27%. In terms of geography, the largest proportion (45%) of investor fund searches for the next 12 months are targeting Europefocused funds, followed closely by funds focused on North America (41%, Fig. 13). The proportion of investors searching for opportunities in emerging markets has increased from 9% in Q2 2016 to 13%. Asia-focused vehicles have also seen a slight uptick in appetite. Investors plans for their private debt portfolios remain diverse: more than half (54%) of investors plan to commit less than $50mn to private debt over the next 12 months, while 34% will allocate between $50mn and $499mn (Fig. 14). The majority (77%) of investors plan to make these capital commitments via five or fewer private debt funds over the next year (Fig. 15). Fig. 12: Strategies Targeted by Private Debt Investors in the Next 12 Months, Q2 2016 vs. Q2 Proportion of Fund Searches 60% 50% 40% 30% 20% 10% 0% 39% 51% Mezzanine 35% 45% 45% 43% Distressed Debt Direct Lending 19% 27% Special Situations Strategy Targeted 5% 4% 5% 4% Venture Debt Fund of Funds Q2 2016 Q2 Fig. 13: Regions Targeted by Private Debt Investors in the Next 12 Months, Q2 2016 vs. Q2 Proportion of Fund Searches 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 43% 41% North America 46% 45% 19% 16% Europe Asia Rest of World Region Targeted 13% 9% 8% 9% Emerging Markets Q2 2016 Q2 Fig. 14: Amount of Capital Investors Plan to Commit to Private Debt Funds in the Next 12 Months Fig. 15: Number of Private Debt Funds Investors Plan to Commit to in the Next 12 Months 12% 7% 16% Less than $50mn $50-99mn 16% 1-5 Funds 6-10 Funds 54% $100-499mn 10 Funds or More 18% $500mn or More 77% 9
PREQIN QUARTERLY UPDATE: PRIVATE DEBT, Q2 DRY POWDER As at June, private debt managers hold $205bn in dry powder, up $8.9bn from December 2016 (Fig. 16). Distressed debt funds continue to hold the most dry powder ($68bn) of any private debt strategy; direct lending and mezzanine follow with $61bn and $51bn respectively. North America-focused funds account for two-thirds ($138bn) of available private debt capital, adding $4.6bn since December 2016 (Fig. 17). The amount of available capital held by funds focused on Europe increased by 11% to $57bn, the largest growth of any region. Dry powder levels in Asia-focused funds declined by $1bn, while Rest of World-focused dry powder remained the same at $1.6bn. Fig. 18 displays total private debt dry powder versus that of buyout funds since 2008, providing context for the private debt market and potential capacity for capital deployment amid continued growth. Although the aggregate amount of available capital for private debt as at June has surpassed $200bn for the second time since 2008, as a proportion (36%) of total buyout dry powder, this is the lowest figure since December 2011. Oaktree Capital Management continues to hold the largest amount of capital available for investment ($13.6bn) among private debt managers (Fig. 19), although this has decreased by $3.4bn over Q2. GSO Capital Partners ($13.2bn) and Goldman Sachs Merchant Banking Division ($8.0bn) round out the top three. Fig. 16: Private Debt Dry Powder by Fund Type, 2008-250 Fig. 17: Private Debt Dry Powder by Primary Geographic Focus, 2008-160 Dry Powder ($bn) 200 150 100 50 Dry Powder ($bn) 140 120 100 80 60 40 137.8 56.6 0 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Direct Lending Mezzanine Venture Debt Distressed Debt Special Situations Dec-14 Dec-15 Dec-16 Jun-17 20 0 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Jun-17 9.2 1.6 North America Europe Asia Rest of World Fig. 18: Dry Powder: Private Debt vs. Buyout, 2008 - Dry Powder ($bn) 600 500 400 300 200 100 0 576 535 476 477 473 423 432 447 388 360 215 190 196 205 176 111 104 116 131 132 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Jun-17 Private Debt Buyout Fig. 19: 10 Largest Private Debt Fund Managers by Estimated Dry Powder Firm Headquarters Estimated Dry Powder ($bn) Oaktree Capital Management US 13.6 GSO Capital Partners US 13.2 Goldman Sachs Merchant Banking Division US 8.0 HPS Investment Partners US 6.5 Cerberus Capital Management UK 6.5 Hayfin Capital Management UK 5.6 Ares Management US 5.5 Intermediate Capital Group US 5.4 Fortress Investment Group US 4.6 Crescent Capital Group US 3.9 10 Preqin Ltd. / www.preqin.com
DOWNLOAD DATA PACK: www.preqin.com/quarterlyupdate FUND PERFORMANCE Direct lending funds have the highest horizon IRRs across the one-, three- and five-year periods shown in Fig. 20, with the five-year figure standing at over 16%. Mezzanine strategies on an annualized basis have provided robust returns above that of the private debt asset class as a whole, with a five-year horizon IRR of 12.2% to September 2016. Overall, direct lending has produced low double-digit returns in all three timeframes, as has mezzanine over the three- and five-year investment horizons. Among post-2006 vintage private debt funds, funds of vintage 2009 have the highest median net IRR (+14.0%) and also the highest top quartile boundary at 20.5%, which is nearly 3x that of the bottom quartile boundary (+7.0%), highlighting the importance of manager and fund selection in the asset class (Fig. 21). Fig. 20: Private Debt: Horizon IRRs by Fund Type (As at September 2016) 18% Dry powder levels within the private debt asset class have remained near all-time highs in recent quarters. Current available capital for the asset class sits at $205bn as at June, $10bn less than the record high of $215bn in December 2015. Fig. 22 illustrates the relationships between called-up to committed capital, distributed to paid-in capital and residual value to paid-in capital, adding context to the picture of capital flows across the industry. As expected, the ratio of distributed to paid-in capital is substantially smaller among more recent vintage funds than earlier vintages, and the inverse is true for the ratio of residual value to paid-in capital. Private debt funds of 2010 vintage have distributed 84% of paid-in capital back to investors, while 2011 vintages have distributed 43%. Fig. 21: Private Debt Median Net IRRs and Quartile Boundaries by Vintage Year 25% Annualized Return 16% 14% 12% 10% 8% 6% 4% Direct Lending Mezzanine Distressed Debt Private Debt Net IRR since Inception 20% 15% 10% 5% Top Quartile Net IRR Boundary Median Net IRR Bottom Quartile Net IRR Boundary 2% 0% 1 Year to Sep-16 3 Years to Sep-16 5 Years to Sep-16 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Vintage Year Fig. 22: Private Debt - Median Called-up, Distributed and Residual Value Ratios by Vintage Year 160% 140% 120% 100% 80% 60% 40% 20% 0% Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Vintage Year Distributed to Paid-in Capital Residual Value to Paid-in Capital Called-up to Commited Capital Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Sep-16 DATA SOURCE: Private Debt Online is constantly updated by our teams of research analysts and represents the most complete source of industry intelligence available today. Use it to: Find potential investors for funds and use as a powerful investor relations and fund marketing tool. Develop new business and identify potential clients and opportunities. Conduct due diligence on firms, with net-to-investor returns showing how well individual fund managers have performed. Identify and track firms with capital available to invest in companies, and view their transaction history and preferences. For more information, please visit: www.preqin.com/privatedebt 11
PREQIN QUARTERLY UPDATE: PRIVATE DEBT, Q2 CONFERENCES JULY Conference Dates Location Organizer Preqin Speaker Discount Code Family Office & Private Wealth Management Forum 24-26 July Newport, RI Opal Financial Group - - SEPTEMBER Conference Dates Location Organizer Preqin Speaker Discount Code Total Alts 7-8 September San Francisco IMN - - 8th Specialty Finance Summit 13-14 September New York iglobal Forum - - Emerging Managers Summit Women's Investment Management Leadership Summit Ai CEO Institutional Investment Summit LPGP Connect Private Debt Chicago DM Alternatives Conference SuperReturn Asia IPE in Person Investing in Private Debt Global Distressed Investments Forum Channel Islands Funds Forum 14-15 September 14 September 18 September 19 September 21-22 September 25-28 September 25-26 September 26 September 27 September New York New York Opal Financial Group Opal Financial Group - - - - New York Africa Investor - - Chicago LPGP Connect Ryan Flanders - Seoul DarcMatter - - Hong Kong KNect365 Mark O'Hare Felice Egidio 10% Discount FKR2433PRQW Amsterdam IPE Ryan Flanders - London WJ Global Group - - Jersey BL Global Amy Bensted Tom Carr - OCTOBER Conference Dates Location Organizer Preqin Speaker Discount Code Australian Investors Summit 5-6 October Sydney marcus evans Summits - - Latin Private Wealth Management Summit FundForum Middle East & Africa 9-10 October 9-11 October Cancún marcus evans Summits - - Dubai KNect365 - - EURUS 12 October Zürich EURUS Forum - - Global Investors Summit C4K Investors Conference Family Office & Private Wealth Forum West 16-18 October 18-19 October 25-27 October Montreux marcus evans Summits - - Toronto Capitalize for Kids - - Napa, CA Opal Financial Group - - 12 Preqin Ltd. / www.preqin.com
DOWNLOAD DATA PACK: www.preqin.com/quarterlyupdate 8TH SPECIALTY FINANCE SUMMIT DATE: 13-14 September INFORMATION: LOCATION: ORGANIZER: http://goo.gl/4rp75y New York iglobal Forum iglobal Forum is pleased to present the upcoming 8th Specialty Finance Summit taking place in New York on September 13th & 14th,! 8th Specialty Finance Summit will bring together thought leaders from all sides of the specialty finance industry. 13
PREQIN QUARTERLY UPDATE: PRIVATE DEBT, Q2 LPGP CONNECT 2ND ANNUAL PRIVATE DEBT CHICAGO DATE: 19 September INFORMATION: http://www.lpgpconnect.com LOCATION: Hyatt Regency McCormick Place, 2233 S Martin Luther King Dr, Chicago, IL 60616, USA ORGANIZER: LPGP Connect The LPGP Connect 2nd Annual Private Debt Chicago conference brings together over 190 LPs and GPs from the global private debt community to analyse the latest trends in the market, discover new investment opportunities and build meaningful business relationships for long term growth. 60+ active institutional investors 30+ fund of funds LP-GP dinner Unparalleled networking opportunities Held strictly under Chatham House Rules GLOBAL DISTRESSED INVESTMENTS FORUM DATE: 26 September INFORMATION: LOCATION: ORGANIZER: http://www.wjglobalgroup.com/ London Marriott Hotel Grosvenor Square WJ Global Group Changing perspectives and igniting discussions, the GDI Forum brings together senior executives from investment firms, funds, banks, AMCs and more to discuss current market trends and developments within the fields of distressed investing. Join us alongside leaders at the forefront of the industry and take part in the international conversation about NPLs, CRE, private equity, debt purchasing and much more. 14 Preqin Ltd. / www.preqin.com
PRIVATE DEBT ONLINE With global coverage and detailed information on all aspects of the private debt asset class, Preqin s industry-leading Private Debt Online service keeps you up-to-date on all the latest developments in the private debt universe. Find out how Preqin s range of private debt products and services can help you: www.preqin.com/privatedebt New York London Singapore San Francisco Hong Kong Manila alternative assets. intelligent data.