Blue Chip GPs Dominate 2023 Private Credit Fundraising
With Intelligence’s inaugural Private Credit Fundraising report highlights LPs' strong preference for franchise name managers.
With tracked $198bn of private credit fund closes in 2023, with over 75% of money going to managers established before the 2008 Great Financial Crisis (GFC). Meanwhile, the 10 largest funds accounted for 49% of all money raised in private debt last year.
Speaking to With, LPs said that they are considerably more likely to allocate to a private credit team with experience of managing through a financial crisis.
The possibility of a higher-for-longer interest rate environment, coupled with upcoming maturity walls in the leveraged loan market, is fueling concerns of an uptick in defaults in the medium term – putting a premium on GPs with track record of dealing with a large-scale distressed cycle.
While pre-GFC managers dominated overall, there were some standouts among newer GPs.
Arcmont Asset Management and Hayfin Capital Management – early movers in the post–2008 European direct lending boom – broke into the top 10 by total capital raised, at $10.9bn and $6.9bn, respectively. Meanwhile, Sixth Street, established by former Goldman Sachs big hitters in 2009, raised $6bn, putting it in 10th spot.
However, for emerging managers, the picture is far tougher. Six GPs founded within the past five years held final closes in 2023, accounting for just $1.8bn – less than 1% of the total. The largest was All Seas Capital's $400m debut fund, managed by former KKR European credit duo Cristobal Cuart and Marc Ciancimino.
Perhaps with this in mind, several recent new entrants have sought out a deep-pocketed partner, given the increasingly capital-intensive nature of private debt.
Among the GPs on With’s recent Emerging Managers to Watch list, available to all With Intelligence subscribers, 5C Investment Partners has launched with an anchor investment from Michael Dell’s family office, while Luminarx has teamed up with Citi for a $2bn direct lending joint venture.
Other pros who might be expected to set up a new firm have opted to join established asset managers to build out a platform, such as Blackstone executive Steve Kuppenheimer, who joined Lord Abbett last year to spearhead its push into private credit.
The full Private Credit Fundraising Report is available on the With Intelligence platform. Providing insights on 2023 fundraising strategies, series, and sectors.
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