Key Takeaways
- • Private debt managers raised $30.6 billion in the first quarter of 2024, the lowest quarterly total since 2020, according to data provider Preqin.
- • The Q1 figure sits roughly 14% below the average of $35.8 billion recorded in every first quarter since 2017.
- • Interest rates and inflation are the top two investor concerns for private debt, cited by 70% and 37% of survey respondents, respectively.
- • Persistently high inflation and the Federal Reserve signaling that rates will stay elevated for longer are weighing on capital commitments to the asset class.
Summary
Private credit fundraising fell to its lowest level in any quarter since 2020 in the first three months of 2024, as inflation remains stubbornly high and the Federal Reserve prepares investors for interest rates to stay elevated for longer, according to Bloomberg.
Managers across the private debt market raised $30.6 billion in the first quarter, roughly 14% below the average of $35.8 billion raised in every first quarter since 2017, based on a report from data provider Preqin Ltd. The shortfall underscores the sensitivity of allocator commitments to the rate environment, with fundraising momentum softening even as the asset class has grown into a major alternative investment strategy.
The Preqin report identifies investors' top concerns for private debt. Interest rates were cited by 70% of those surveyed and inflation by 37%, making the macro rate outlook the dominant consideration for allocators evaluating new private credit commitments.
The data points to a more cautious fundraising backdrop for private credit managers as higher-for-longer rate expectations persist. The Bloomberg report does not detail individual fund closes, and the figures reflect aggregate private debt activity across managers as reported by Preqin.
Managers across the private debt market raised $30.6 billion in the first quarter, roughly 14% below the average of $35.8 billion raised in every first quarter since 2017, based on a report from data provider Preqin Ltd. The shortfall underscores the sensitivity of allocator commitments to the rate environment, with fundraising momentum softening even as the asset class has grown into a major alternative investment strategy.
The Preqin report identifies investors' top concerns for private debt. Interest rates were cited by 70% of those surveyed and inflation by 37%, making the macro rate outlook the dominant consideration for allocators evaluating new private credit commitments.
The data points to a more cautious fundraising backdrop for private credit managers as higher-for-longer rate expectations persist. The Bloomberg report does not detail individual fund closes, and the figures reflect aggregate private debt activity across managers as reported by Preqin.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.