Private Debt Survey 2022

 

The latest survey conducted by KPMG illustrates once again the continuous growing appetite of investors for private debt funds.

Indeed, private debt funds have experienced a 45.4% average growth of AuM compared to last year’s survey, reaching EUR 267.8 bn by June 2022. Amidst a challenging market environment with rising interest rates, private assets continue to offer attractive investment opportunities and an appealing risk adjusted return for investors. 

The survey shows that private debt asset managers are improving decision-making through data analytics and artificial intelligence, making processes more cost efficient. In addition, tokenisation of investment vehicles and underlying portfolios have started to emerge.  

Moreover, sustainability in private debt, is gaining in importance. Beyond regulatory compliance, asset managers are integrating ESG considerations into investment strategies to respond to growing investor demand. This survey shows that 3 out of 4 private debt funds fall into article 6 of the SFDR and 23% into article 8, i.e. funds that promote environmental or social characteristics. 

The Luxembourg fund centre remains the domicile of choice for this asset class. Initiators of private debt funds in particular appreciate not only the attractive legal toolbox with the unregulated special limited partnership (SCSp) as well as the reserved alternative investment fund (RAIF) but also value the expertise and sophistication of market participants servicing that segment.

On behalf of ALFI, I would like to express my gratitude to KPMG for their support and to the multiple market participants for their active contribution to this year’s survey. 

Key highlights

Debt funds by sector financed

Debt funds by geographical investment targets

Debt funds by currency

Debt funds by management fee charged

Survey details

Objectives
This study has two main objectives:

  • Interpret current behaviors and structuring trends in private debt funds in Luxembourg and predict where they are headed;
  • Provide qualitative insights based on numerical data.

Methodology
We received data from 11 depositaries acting on the market and representing 905 funds (or sub-funds) investing in private debt. We sent a pre-defined questionnaire to each depositary surveyed in order to gather data on the various debt funds they are in charge of:

A questionnaire of 38 closed-ended questions covering various topics such as: the fund category, their regulatory regimes, legal forms, sizes, geographical investments targets, investors origins or even data regarding the financial statements.

Content
The key findings of the survey are disclosed in this report on a no-name basis.

Research for this survey was carried out since July 2022 by KPMG Luxembourg, in collaboration with ALFI.