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Pandemic first “real” test for private debt market

private_debtThe Covid-19 pandemic has served as the private debt market’s first “real” test, according to a study of investors and fund managers.

Although there was a slump in fundraising seen in the first quarter, with a further decline still on the cards, the majority of global fund managers still believe private debt is set to grow over the next three years. 

Despite the uncertain outlook projected across many markets, 95% of investors and managers surveyed say the private debt market will bounce back and increase in size.

The study, carried out by fund administrator IQ-EQ alongside IFI Global, also found that over 60% of respondents do not anticipate a drop-off in fundraising at all.

According to Justin Partington, group head of funds at IQ-EQ, investors and managers are “overwhelmingly” optimistic in spite of current challenges.

“Covid-19 is not thought to have negatively impacted the debt market’s growth potential, nor is there expected to be a drop off in fundraising,” he said.

Partington added “most projections are seen as positive”, for the debt market in particular.

Fund managers from across the globe took part in the survey, with a combined $388 billion in assets under management.

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