PDF | Research | Week of Jan 27 2025

Next up is the second of our five themes for the year ahead: “A busier market: Providers of creative and flexible capital solutions will find favor.” 

As a brightening macro picture releases pent-up demand for private capital dealmaking – there was $2.6 trillion of dry powder among global buyout and venture capital firms waiting in the wings at the end of H1 2024, per S&P Global – issuers and private equity firms will seek bespoke financings.

Private debt has consistently proven its capacity to achieve this. Over the past decade direct lending, for example, has taken a greater share of LBO acquisition finance. By the end of the first three quarters of 2024, it was the debt funding source of choice in 92% of US LBO deals, per LSEG LPC (See our Chart of the Week)...

Direct lending’s share of buyout financings now dwarfs that of the bank market.

• Click here to access Bloomberg's US Leveraged Finance Chartbook

To Monitor Upcoming US Institutional Loan Issuance, run PREL ＜GO＞ from a Bloomberg Terminal.

At approximately $199.4b through January 29th, the new year has picked up right where 2024 left off in terms of record levels of US institutional leveraged loan launches...

Contact: Vincent Daigger / Bloomberg

As a relatively young asset class, private debt still has plenty of room for bigger LP commitments. Insurers are leading the way. 

You don’t have to look too hard in the financial press to find commentary suggesting that insurance and private credit are a match made in heaven given the way that the characteristics of the two seem to be so well aligned...

Contact: Andy Thomson / Private Debt Investor

Total leverage on sponsored middle market deals inched down to 4.70x on average in 4Q24, driven by lower junior leverage. First-lien leverage came in at 4.48x in 4Q24, up from 4.46x in 3Q24, while junior leverage declined to 0.22x from 0.28x...

Contact: CJ Doherty / LSEG

Industrials PE activity was relatively strong in 2024, with industrials seeing an estimated 1,799 deals and $135.8 billion in deal value—accounting for 21.2% of total deal activity by deal count during the period, compared with an average of 24.5% of total deal activity over the past five years...



Contact: Garrett Black / PitchBook

Contact: Eric Rosenthal / KBRA DLD

Middle Market & Private Credit

Fitch U.S. MM CLO Spotlight – December 2024

Learn More

Exposure to assets with Fitch IDRs or credit opinions of ‘CCC+’ or below, excluding non-rated assets, has slightly decreased since last quarter and the same period last year, now standing at 18.5%, down from 19.3% last quarter and 18.9% last year...

Contact: Brad Hamner / FitchRatings

Launched Volume

New-issue Yields

Weekly Fund Flows

Weekly fund flows source: Lipper

Contact: Robert Polenberg / LevFin Insights

Debtwire Middle-Market

Twin peaks: loans and bonds hit new milestones in 2024

Loan issuance reached new heights in 2024. The Americas added USD 1.02trn in 4Q24 for a full-year total of USD 3.8trn, the highest number recorded in Dealogic’s database. The volume surpassed the previous high of USD 3.5trn posted in 2021...

Contact: Jayjeet Sharma/ Debtwire 

Private Debt Intelligence

Hurdle and carry rates climb for riskier private debt strategies

Read more in ‘Preqin 2025 Global Report: Private Debt’

Incentive payments to private capital GPs have two main variables, the hurdle rate and carried interest. In private debt, these two fee rates vary depending on the risk-return profile of the strategy...

Contact: William Bennett-Lynch/ Preqin

Contact: Stefan Shaffer / SPP Capital Partners