The personal debt secondary market will see elevated deal stream and decrease reductions this yr, a brand new survey has concluded.
Ely Place Companions’ newest Non-public Debt Secondary Market Survey discovered that the yr forward will see a “massive development in quantity” and amount of offers, because the sector matures.
Elevated competitors and a stabilising financial system may additionally result in larger pricing, the survey discovered.
Learn extra: Rising ‘bifurcation’ of high quality in center market personal credit score
Deal quantity is anticipated to extend by between 50 and 100 per cent this yr, with as much as $15bn (£11.96bn) of closed transactions predicted.
Ely Place Companions discovered that high-quality senior loans can be significantly common this yr, with LPs driving the overwhelming majority of those offers. Pensions funds are anticipated to be the biggest sellers.
“Non-public debt secondary offers have been rising steadily in dimension and quantity over the previous twelve months,” mentioned Daniel Roddick, founder at Ely Place Companions.
“The institution of a devoted purchaser universe has given LPs confidence to deliver massive portfolios to market.
“On the similar time, GPs are proactively profiting from the market to speed up liquidity for his or her buyers.”
Learn extra: Advisers look to reallocate from public fastened earnings to non-public credit score
The survey requested quite a lot of specialist buyers for his or her views on the state of the personal debt secondary market, with some respondents providing rather more optimistic predictions.
One said that the personal debt market will develop to between $2tn and $2.5tn this yr, with one to 1.5 per cent of that altering fingers within the secondary market.
One other investor predicted that deal stream for 2024 may very well be as excessive as $50bn.
Learn extra: Direct lending’s resilience “might be examined”
