Private Debt deals: structural shifts in a late-cycle market


CEPRES’ latest analysis shows the Pricing multiples for the top 25 per cent deals in North America, are rising at a much faster pace compared to the rest of the market.

In contrast to the North American market, European pricing shows a tighter spread among the quartiles which suggests that it is even more difficult for GPs to source and invest in opportunities that are particularly cheaper compared to the rest of the market.

Consequently, this means there is less room for returns driven by multiple expansion compared to North America with a broader spread of pricing multiples giving GPs a better chance to get a return boost through pricing arbitrage.

Source: CEPRES Platform                       Copyright © 2019 CEPRES GmbH

The full report is available to CEPRES members from: https://www.cepres.com/latest-intelligence-for-lps

Christopher Godfrey, President, CEPRES, says: “Today, Second Lien and Unitranche deals have replaced the role of traditional Mezzanine to fill the funding gap in both sponsored and non-sponsored transactions. Overall the use of private debt has increased across the board and it remains to be seen how the increasingly crowded private debt market will evolve in the coming years.”

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